<PAGE>

                                UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                           Washington, D.C.  20549

                                 FORM 10-Q

              [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                    OF THE SECURITIES EXCHANGE ACT OF 1934

                                   OR

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



 For the quarterly period ended                 Commission file number 0-20526 
      September 30, 1996 


                           OLYMPIC FINANCIAL LTD. 
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter) 
 
         Minnesota                                            41-1664848 
      (State or other                                      (I.R.S. Employer 
       jurisdiction                                      Identification No.) 
    of incorporation or 
       organization) 
 
 
            7825 Washington Avenue South, Minneapolis, MN  55439-2435 
--------------------------------------------------------------------------------
                    (Address of principal executive offices) 
 
                                 (612) 942-9880
                                 --------------
               Registrant's telephone number, including area code 
 
 
Indicate by check mark whether the registrant (1) has filed all reports 
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 
1934 during the preceding 12 months (or for such shorter period that the 
registrant was required to file such reports), and (2) has been subject to 
such filing requirements for the past 90 days. 

                                                  YES   X           NO 
                                                     ----------      ---------

The number of shares of the Common Stock of the registrant outstanding as of 
November 6, 1996 was 34,773,144.

<PAGE>

                                FORM 10-Q INDEX


PART I    FINANCIAL INFORMATION                                             PAGE
------                                                                      ----

Item 1.   Consolidated Financial Statements . . . . . . . . . . . . . . .      3

Item 2.   Management's Discussion and Analysis of Financial Condition
          and Results of Operations . . . . . . . . . . . . . . . . . . .      9

PART II   OTHER INFORMATION

Item 1.   Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . .     19

Item 2.   Changes in Securities . . . . . . . . . . . . . . . . . . . . .     19

Item 3.   Defaults Upon Senior Securities . . . . . . . . . . . . . . . .     19

Item 4.   Submission of Matters to a Vote of Security Holders . . . . . .     19

Item 5.   Other Information . . . . . . . . . . . . . . . . . . . . . . .     19

Item 6.   Exhibits and Reports on Form 8-K  . . . . . . . . . . . . . . .     20

SIGNATURES  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     23

EXHIBIT INDEX   . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     24


The financial information for the interim periods is unaudited.  In the 
opinion of management, all adjustments necessary for a fair presentation of 
the results of operations (which are of a normal recurring nature) have been 
included.  The results of operations for an interim period are not 
necessarily indicative of the results that may be expected for a full year or 
any other interim period.

                       SAFE HARBOR STATEMENT UNDER THE
                PRIVATE SECURITIES LITIGATION REFORM ACT OF 1996

This Form 10-Q for the quarter ended September 30, 1996 contains certain 
forward-looking statements as defined in the Private Securities Litigation 
Reform Act of 1995, which may be identified by the use of forward-looking 
terminology such as "may," "will," "expect," "anticipate," "estimate," 
"goal," "continue," or comparable terminology, that involve risks or 
uncertainties and that are qualified in their entirety by the cautions and 
risk factors contained in the Company's Form 8-K dated February 20, 1996 and 
other documents filed with the Securities and Exchange Commission.

                                      2

<PAGE>
 
                            OLYMPIC FINANCIAL LTD.
                         CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                               (UNAUDITED)
                                                                               SEPTEMBER 30,      DECEMBER 31,
                                                                                   1996               1995
                                                                              --------------      ------------

<S>                                                                            <C>                 <C>
(DOLLARS IN THOUSANDS, EXCEPT SHARE AMOUNTS)
ASSETS

Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . .        $   3,593          $   1,340
Due from securitization trust . . . . . . . . . . . . . . . . . . . . . .          188,373               ----
Auto loans held for sale  . . . . . . . . . . . . . . . . . . . . . . . .           18,925            118,556
Finance income receivable . . . . . . . . . . . . . . . . . . . . . . . .          430,024            249,581
Furniture, fixtures and equipment . . . . . . . . . . . . . . . . . . . .           12,629              6,346
Advances due to servicer  . . . . . . . . . . . . . . . . . . . . . . . .           12,364              9,046
Other assets  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .           17,917             12,925
                                                                                 ---------          ----------
     Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . .        $ 683,825          $ 397,794
                                                                                 ---------          ----------
                                                                                 ---------          ----------

LIABILITIES AND SHAREHOLDERS' EQUITY

Amounts due under warehouse facilities  . . . . . . . . . . . . . . . . .        $  38,486          $  26,530
Senior term notes . . . . . . . . . . . . . . . . . . . . . . . . . . . .          145,000            145,000
Subordinated notes  . . . . . . . . . . . . . . . . . . . . . . . . . . .           53,563             13,005
Capital lease obligations . . . . . . . . . . . . . . . . . . . . . . . .            8,049              3,924
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . .           44,405             18,700
Accounts payable and accrued liabilities  . . . . . . . . . . . . . . . .           20,059              9,822
                                                                                 ---------          ----------
     Total liabilities  . . . . . . . . . . . . . . . . . . . . . . . . .          309,562            216,981

Commitments and contingencies

Shareholders' equity:
Capital stock, $.01 par value, 100,000,000 shares authorized:
8% Cumulative Convertible Exchangeable Preferred Stock, 689,483 and 
  1,071,036 shares issued and outstanding, respectively . . . . . . . . .                7                 11
Common stock 33,003,889 and 22,038,567 shares issued and outstanding,
  respectively  . . . . . . . . . . . . . . . . . . . . . . . . . . . . .              330                220
Additional paid-in capital  . . . . . . . . . . . . . . . . . . . . . . .          308,750            157,204
Retained earnings   . . . . . . . . . . . . . . . . . . . . . . . . . . .           65,176             23,378
                                                                                 ---------          ----------
     Total shareholders' equity . . . . . . . . . . . . . . . . . . . . .          374,263            180,813
                                                                                 ---------          ----------
     Total liabilities and shareholders' equity . . . . . . . . . . . . .        $ 683,825          $ 397,794
                                                                                 ---------          ----------
                                                                                 ---------          ----------

</TABLE>
          SEE NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS.

                                      3

<PAGE>

                                 OLYMPIC FINANCIAL LTD.
                        CONSOLIDATED STATEMENTS OF OPERATIONS
                                     (UNAUDITED)

<TABLE>
<CAPTION>

                                                                            THREE MONTHS ENDED             NINE MONTHS ENDED
                                                                                SEPTEMBER 30,                 SEPTEMBER 30,
                                                                          -----------------------       ------------------------
                                                                              1996        1995             1996          1995
                                                                          ----------    ---------       ----------    ----------
<S>                                                                        <C>            <C>            <C>            <C>
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

REVENUES:
Net interest margin . . . . . . . . . . . . . . . . . . . . . . . . .      $ 18,079       $ 9,601         $  45,464     $ 21,769
Gain on sale of loans . . . . . . . . . . . . . . . . . . . . . . . .        30,113        17,587            80,794       40,947
Servicing fee income  . . . . . . . . . . . . . . . . . . . . . . . .         7,474         3,872            19,774        9,175
Other non-interest income   . . . . . . . . . . . . . . . . . . . . .         1,406           405             4,579          802
                                                                           ---------      --------        ---------      --------
     Total revenues . . . . . . . . . . . . . . . . . . . . . . . . .        57,072        31,465           150,611       72,693
EXPENSES:                                                                                                              
Salaries and benefits . . . . . . . . . . . . . . . . . . . . . . . .        10,286         5,146            28,196       13,718
Other operating expenses  . . . . . . . . . . . . . . . . . . . . . .        13,107         6,097            35,150       15,565
                                                                           ---------      --------        ---------      --------
     Total operating expenses . . . . . . . . . . . . . . . . . . . .        23,393        11,243            63,346       29,283
Long-term debt and other interest expense   . . . . . . . . . . . . .         6,660         5,205            18,609       11,624
                                                                           ---------      --------        ---------      --------
     Total expenses   . . . . . . . . . . . . . . . . . . . . . . . .        30,053        16,448            81,955       40,907
                                                                           ---------      --------        ---------      --------
Operating income before income taxes and extraordinary items  . . . .        27,019        15,017            68,656       31,786
Provision for income taxes  . . . . . . . . . . . . . . . . . . . . .         9,862         6,007            25,706       12,698
                                                                           ---------      --------        ---------      --------
Income before extraordinary items . . . . . . . . . . . . . . . . . .        17,157         9,010            42,950       19,088
Extraordinary items . . . . . . . . . . . . . . . . . . . . . . . . .          ----          ----              ----       (3,856)
                                                                           ---------      --------        ---------      --------
     Net income . . . . . . . . . . . . . . . . . . . . . . . . . . .      $ 17,157       $ 9,010         $  42,950     $ 15,232
                                                                           ---------      --------        ---------      --------
                                                                           ---------      --------        ---------      --------
PRIMARY EARNINGS PER SHARE:                                                                                            
Net income per common share before extraordinary items  . . . . . . .      $   0.47       $  0.34         $    1.32     $   0.89
Extraordinary items per common share  . . . . . . . . . . . . . . . .          ----          ----              ----        (0.19)
                                                                           ---------      --------        ---------      --------
     Net income per common share  . . . . . . . . . . . . . . . . . .      $   0.47       $  0.34         $    1.32     $   0.70
                                                                           ---------      --------        ---------      --------
                                                                           ---------      --------        ---------      --------
FULLY DILUTED EARNINGS PER SHARE:                                                                                      
Net income per share before extraordinary items . . . . . . . . . . .      $   0.44       $  0.30         $    1.20     $   0.74
Extraordinary items per share . . . . . . . . . . . . . . . . . . . .           ----         ----              ----        (0.15)
                                                                           ---------      --------        ---------      --------
     Net income per share . . . . . . . . . . . . . . . . . . . . . .      $   0.44       $  0.30         $    1.20     $   0.59
                                                                           ---------      --------        ---------      --------
                                                                           ---------      --------        ---------      --------

Weighted average common and common                                                                                     
  equivalent shares outstanding
 
Primary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     35,896,149    24,528,119       31,564,219    19,481,661
Fully diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . .     39,423,446    30,406,065       35,851,933    25,888,975

</TABLE>

                                      4

           See notes to unaudited consolidated financial statements.
<PAGE>

                                 OLYMPIC FINANCIAL LTD.
                          CONSOLIDATED STATEMENTS OF CASH FLOWS
                                      (UNAUDITED)
<TABLE>
<CAPTION>

                                                                                                 NINE MONTHS ENDED
                                                                                                   SEPTEMBER 30,
                                                                                            --------------------------
                                                                                                1996          1995
                                                                                            ------------  ------------
<S>                                                                                         <C>           <C>
(DOLLARS IN THOUSANDS)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    $    42,950   $    15,232
Adjustments to reconcile net income to net cash used in operating activities:
    Depreciation and amortization  . . . . . . . . . . . . . . . . . . . . . . . . . . .          3,052           688
    Loss on sale of furniture, fixtures and equipment  . . . . . . . . . . . . . . . . .            147           153
    (Increase) decrease in assets:
       Automobile loans held for sale:
          Purchases of automobile loans  . . . . . . . . . . . . . . . . . . . . . . . .     (2,009,614)   (1,463,746)
          Sales of automobile loans  . . . . . . . . . . . . . . . . . . . . . . . . . .      2,067,225     1,359,044
          Repayments of automobile loans . . . . . . . . . . . . . . . . . . . . . . . .         42,020        19,762
       Finance income receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . .       (180,443)     (118,750)
       Due from securitization trusts  . . . . . . . . . . . . . . . . . . . . . . . . .       (188,373)       38,083
       Advances due servicer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .         (3,318)       (4,616)
       Other assets  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .         (3,601)       (3,035)
    Increase (decrease) in liabilities:
       Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .         25,705        10,035
       Accounts payable and accrued liabilities  . . . . . . . . . . . . . . . . . . . .         10,237        12,393
                                                                                            ------------  ------------
              Total cash used in operating activities  . . . . . . . . . . . . . . . . .       (194,013)     (134,757)
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sales of furniture, fixtures and equipment . . . . . . . . . . . . . . . .             18            37
Purchase of furniture, fixtures and equipment  . . . . . . . . . . . . . . . . . . . . .         (2,764)         (599)
Purchase of subordinated certificates  . . . . . . . . . . . . . . . . . . . . . . . . .         (1,869)       (1,309)
Collections on subordinated certificates . . . . . . . . . . . . . . . . . . . . . . . .            817           287
                                                                                            ------------  ------------
              Total cash used in investing activities  . . . . . . . . . . . . . . . . .         (3,798)       (1,584)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from issuance of Common Stock . . . . . . . . . . . . . . . . . . . . . . .        150,879        90,163
Payment of dividends on 8% Convertible Preferred Stock . . . . . . . . . . . . . . . . .         (1,152)       (1,677)
Proceeds from borrowings under warehouse facilities  . . . . . . . . . . . . . . . . . .      1,297,228     1,155,166
Repayment of borrowings under warehouse facilities . . . . . . . . . . . . . . . . . . .     (1,285,272)   (1,220,073)
Net proceeds from issuance of subordinated notes . . . . . . . . . . . . . . . . . . . .         40,558         8,885
Repayment of long-term debt  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .           ----       (30,000)
Proceeds from issuance of Senior Notes . . . . . . . . . . . . . . . . . . . . . . . . .           ----        55,000
Repayment of Senior Notes  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .           ----       (55,000)
Proceeds from issuance of Senior Term Notes  . . . . . . . . . . . . . . . . . . . . . .           ----       145,000
Repayment of Senior Subordinated Notes . . . . . . . . . . . . . . . . . . . . . . . . .           ----       (15,000)
Deferred debt issuance cost, net . . . . . . . . . . . . . . . . . . . . . . . . . . . .           (338)       (2,754)
Reduction of capital lease obligations . . . . . . . . . . . . . . . . . . . . . . . . .         (1,839)         (817)
                                                                                            ------------  ------------
              Total cash provided by financing activities  . . . . . . . . . . . . . . .        200,064       128,893
                                                                                            ------------  ------------
Net increase (decrease) in cash and cash equivalents . . . . . . . . . . . . . . . . . .          2,253        (7,448)
Cash and cash equivalents at beginning of period . . . . . . . . . . . . . . . . . . . .          1,340        16,617
                                                                                            ------------  ------------
Cash and cash equivalents at end of period . . . . . . . . . . . . . . . . . . . . . . .    $     3,593   $     9,169
                                                                                            ------------  ------------
                                                                                            ------------  ------------
Supplemental disclosures of cash flow information:
    Non-cash activities:
          Additions to capital leases  . . . . . . . . . . . . . . . . . . . . . . . . .    $     5,964   $     2,141
    Cash paid for:
          Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    $    20,062   $     7,318
          Income taxes                                                                      $      ----   $        93

</TABLE>

           See notes to unaudited consolidated financial statements.

                                      5
<PAGE>

                                 OLYMPIC FINANCIAL LTD.
                     CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
                                     (UNAUDITED)
<TABLE>
<CAPTION>
                                                          FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996
                                  -------------------------------------------------------------------------------------------------
                                    NUMBER OF       NUMBER OF                                ADDITIONAL
                                    PREFERRED        COMMON       PREFERRED     COMMON         PAID IN      RETAINED
                                     SHARES          SHARES         VALUE      PAR VALUE       CAPITAL      EARNINGS        TOTAL
                                  -------------   ------------    ---------    ---------     -----------    ---------    ----------
<S>                                <C>             <C>             <C>          <C>          <C>            <C>          <C>     
(DOLLARS IN THOUSANDS, EXCEPT
SHARE AMOUNTS)
BALANCE, DECEMBER 31, 1995          1,071,036      22,038,567       $  11        $  220       $ 157,204     $ 23,378     $ 180,813
Exercise of options and warrants .       ----         940,775        ----             9           4,171         ----         4,180
Issuance of Common Stock:     
     Public Offering . . . . . . .       ----       8,050,000        ----            81         145,925         ----       146,006
     Benefit plans . . . . . . . .       ----         195,752        ----             2             691         ----           693
Amortization of deferred
  compensation . . . . . . . . . .       ----            ----        ----          ----             773         ----           773
Preferred Stock conversion to
  Common Stock . . . . . . . . . .   (381,553)      1,778,795          (4)           18             (14)        ----          ----
Payment of dividends on 8%
  Convertible Preferred Stock  . .       ----            ----        ----          ----            ----       (1,152)       (1,152)
Net income . . . . . . . . . . . .       ----            ----        ----          ----            ----       42,950        42,950
                                  -------------   ------------    ---------    ---------     -----------    ---------    ----------
BALANCE, SEPTEMBER 30, 1996           689,483      33,003,889       $   7         $  330       $ 308,750     $ 65,176    $ 374,263
                                  -------------   ------------    ---------    ---------     -----------    ---------    ----------
                                  -------------   ------------    ---------    ---------     -----------    ---------    ----------
</TABLE>

          See notes to unaudited consolidated financial statements.

                                      6
<PAGE>

                                 OLYMPIC FINANCIAL LTD.
                NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                      FOR THE QUARTER ENDED SEPTEMBER 30, 1996

1.   BASIS OF PRESENTATION

     The interim financial statements have been prepared by the Company 
pursuant to the rules and regulations of the Securities and Exchange 
Commission applicable to quarterly reports on Form 10-Q.  Certain information 
and footnote disclosures normally included in financial statements prepared 
in accordance with generally accepted accounting principles have been 
condensed or omitted pursuant to such rules and regulations, although 
management believes that the disclosures are adequate to make the information 
presented not misleading. These financial statements should be read in 
conjunction with the audited consolidated financial statements and related 
notes and schedules included in the Company's 1995 Annual Report filed on 
Form 10-K/A-2 dated March 18, 1996.

     The consolidated financial statements include the accounts of the 
Company and its wholly-owned subsidiaries.  All significant intercompany 
accounts and transactions have been eliminated. 

     Certain reclassifications have been made to the September 30, 1995 
balances to conform to current period presentation.

2.   FINANCE INCOME RECEIVABLE

     Finance income receivable includes the estimated present value of future 
amounts permitted to be withdrawn from spread accounts established in 
connection with securitization transactions.

                                               AT SEPTEMBER 30,  AT DECEMBER 31,
                                                    1996              1995
(DOLLARS IN THOUSANDS)                        ----------------   ---------------
Estimated cash flows on loans sold, net of
estimated prepayments (1) . . . . . . . . . .    $  593,264        $  349,097
Less:
     Discount to present value  . . . . . . .       (28,262)          (19,466)
     Deferred servicing income  . . . . . . .       (53,670)          (37,780)
     Reserve for loan losses  . . . . . . . .       (81,308)          (42,270)
                                              ----------------   ---------------
                                                 $  430,024        $  249,581
                                              ----------------   ---------------

(1)  Included in estimated cash flows is the anticipated return to the 
     Company of restricted cash inrequired spread accounts.  Actual spread 
     account balances were $122.1 million at September 30, 1996 and $65.4 
     million at December 31, 1995.

                                      7
<PAGE>

The following represents the roll-forward of the finance income receivable 
balance:

(DOLLARS IN THOUSANDS)
BALANCE, DECEMBER 31, 1995                                           $  249,581
     Excess cash flows on loans sold, net of estimated prepayments .    196,311
     Return of excess cash flows (1) . . . . . . . . . . . . . . . .    (28,869)
     Recognition of present value effect of cash flows . . . . . . .     13,001
                                                                     -----------
BALANCE, SEPTEMBER 30, 1996                                          $  430,024
                                                                     -----------
                                                                     -----------

(1)  Includes approximately $2.5 million of cash released to the Company from
     remaining spread account balances associated with three securitization 
     transactions initiated in 1992 and closed out during the first nine months
     of 1996.

3.   SUBORDINATED NOTES
                                               AT SEPTEMBER 30,  AT DECEMBER 31,
                                                    1996              1995
(DOLLARS IN THOUSANDS)                        ----------------   ---------------
Senior subordinated notes, Series 1996-A . . .   $    30,000        $     ----
Junior subordinated notes  . . . . . . . . . .        23,563            13,005
                                              ----------------   ---------------
                                                 $    53,563        $   13,005
                                              ----------------   ---------------
                                              ----------------   ---------------

     In March 1996, the Company sold to the public $30.0 million aggregate 
principal amount of its 10.125% Subordinated Notes , Series 1996-A due 2001 
(the "Senior Subordinated Notes"). Interest on the Senior Subordinated Notes 
is payable monthly beginning May 15, 1996.  The Subordinated Notes may not be 
redeemed prior to May 15, 1998.  At any time on such date or thereafter, the 
Company may at its option elect to redeem the Senior Subordinated Notes, in 
whole or in part, at 101.5% of the principal amount of Senior Subordinated 
Notes redeemed, or 100% thereof on or after May 15, 1999, plus accrued 
interest to and including the redemption date.  The Senior Subordinated Notes 
are unsecured general obligations of the Company and are subordinated in 
right of payment to all existing and future Senior Debt (as defined in the 
indenture governing the Senior Subordinated Notes).

4.   SHAREHOLDERS' EQUITY

     On April 22, 1996, the Company completed a public offering of 8,050,000 
shares of its Common Stock at $19.25 per share, including an over-allotment 
option of 1,050,000 shares, and received net proceeds from the issuance of 
the Common Stock of approximately $146.0 million.

RESTRICTED STOCK ELECTION PLAN

     As disclosed in the Company's 1995 Annual Report filed on Form 10-K/A-2, 
in December 1995 the Board of Directors of the Company adopted a Restricted 
Stock Election Plan applicable to bonuses which may be earned by certain key 
associates of the Company in the years 1998 through 2000 (the "1998 Stock 
Election Plan") subject to approval by the Company's shareholders. The Stock 
Election plan was approved by shareholders on May 16, 1996.  As a result, the 
Company recorded deferred compensation as a component of equity in the amount 
of $4.8 million during the second quarter of 1996.  The deferred compensation 
will be amortized and recognized as compensation expense ratably over the 
shorter of the period in which management anticipates restrictions will be 
lifted or the maximum vesting period.

                                      8
<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS

OVERVIEW

     Substantially all of the Company's earnings are derived from the 
purchase, securitization and servicing of consumer automobile loans 
originated primarily by new car dealers affiliated with major foreign and 
domestic manufacturers.  At September 30, 1996, the Company had purchased 
loans from more than 7,000 dealers in 38 states, a substantial majority of 
which sell loans to the Company on a regular basis.  Loans are purchased 
through 17 regional buying centers, supplemented by a network of dealer 
development representatives ("DDRs") serving various markets, or "spokes", 
surrounding the buying center "hubs".  DDRs operating in these "spokes" 
generate loans in their assigned market, and all administrative functions, 
including credit approval and loan processing, are performed at the "hub" or 
at the Company's headquarters in Minneapolis, Minnesota.

THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995

RESULTS OF OPERATIONS

     NET INTEREST MARGIN.  The components of net interest margin for each of 
the three and nine month periods ended September 30 were:

<TABLE>
<CAPTION>
                                                        THREE MONTHS ENDED         NINE MONTHS ENDED
(DOLLARS IN THOUSANDS)                                     SEPTEMBER 30,             SEPTEMBER 30,
                                                       ---------------------     ---------------------
                                                         1996        1995          1996        1995
                                                       ---------   ---------     ---------   ---------
<S>                                                    <C>          <C>           <C>        <C>
Interest income on loans, net of interest
  expense on warehouse facilities . . . . . . . . . .  $  9,161     $ 5,470       $ 21,801   $ 11,499
Interest income on short-term investments, spread
  accounts and other cash accounts  . . . . . . . . .     4,105       1,927         11,140      5,479
Recognition of present value discount . . . . . . . .     5,048       2,254         13,001      4,856
Provision for credit losses on loans held for sale. .      (235)        (50)          (478)       (65)
                                                       ---------   ---------     ---------   ---------
     Net interest margin  . . . . . . . . . . . . . .  $ 18,079     $ 9,601       $ 45,464   $ 21,769
                                                       ---------   ---------     ---------   ---------
                                                       ---------   ---------     ---------   ---------
</TABLE>

     Net interest margin increased 88% and 109% during the three and nine 
month periods ended September 30, 1996, respectively, compared with the same 
periods in 1995.  The rise in net interest margin is primarily due to growth 
in the average balance of loans held for sale pending securitization, 
increased weighted average interest rates earned on loans purchased, and 
increased volume of loans securitized.

     Increased loan purchasing volume during the three and nine month periods 
ended September 30, 1996, resulted in increases from the same periods a year 
ago of 25% and 54%, respectively, in the average balance of loans held for 
sale pending securitization, on which the Company earns interest income until 
such loans are securitized.  The growth in loan purchasing volume is 
primarily attributed to the opening of three additional regional buying 
centers since September 1995 and the expansion of the Company's dealer 
network to more than 7,000 dealers at September 30, 1996, compared to 4,494 
dealers at September 30, 1995.  Loan purchases under the Company's Premier 
and Classic loan programs were:

                                      9
<PAGE>
<TABLE>
<CAPTION>
                                                        THREE MONTHS ENDED          NINE MONTHS ENDED
                                                           SEPTEMBER 30,              SEPTEMBER 30,
                                                       ---------------------    ------------------------
                                                         1996        1995          1996        1995
                                                       ---------   ---------    -----------  -----------
<S>                                                    <C>          <C>           <C>        <C>
Premier . . . . . . . . . . . . . . . . . . . . . .     $438,792   $464,249     $1,362,185   $1,233,845
Classic . . . . . . . . . . . . . . . . . . . . . .      279,433     89,349        647,429      229,901
                                                       ---------   ---------    -----------  -----------
     Total loans purchased  . . . . . . . . . . . .     $718,225   $553,598     $2,009,614   $1,463,746
                                                       ---------   ---------    -----------  -----------
                                                       ---------   ---------    -----------  -----------
</TABLE>

     The net interest margin earned on loans held for sale was further 
enhanced by an increase in the annual percentage interest rate ("APR") paid 
by obligors on loans purchased. During the three and nine month periods ended 
September 30, 1996, the weighted average APR on loans purchased was 14.82% 
and 14.36%, respectively, compared with 13.92% and 14.30%, respectively, 
during the same periods in 1995.  The increase in APR is principally due to 
an increased proportion of its higher yielding Classic loans which grew from 
16% of total loan purchases during both the three and nine month periods 
ended September 30, 1995, to 39% and 32%, respectively, during the same 
periods in 1996.

     The rise in interest income on short-term investments, spread accounts 
and other cash accounts and the increase in earnings from the recognition of 
the present value discount associated with the gain on sale of loans is 
attributable to growth in the Company's securitized loan portfolio which 
increased to $3.4 billion at September 30, 1996 from $1.8 billion at 
September 30, 1995.

     GAIN ON SALE OF LOANS.  Gain on sale of loans provided net revenues of 
$30.1 million and $80.8 million during the three and nine months ended 
September 30, 1996, respectively, representing increases of 71% and 97%, 
respectively, from the same periods a year ago.  The increase in gain on sale 
of loans primarily resulted from growth in the volume of loans securitized, 
an increase in gross interest rate spreads and a decrease in the 
participation rate paid by the Company to dealers for loan purchases.  During 
the three and nine months ended September 30, 1996, the Company securitized 
$737.0 million and $2.1 billion of loans, respectively, which represent 
increases of 48% and 52%, respectively, from the same periods in 1995.  Gross 
interest rate spreads earned on loans securitized and utilized in the 
computation of gain during the three and nine months ended September 30 are 
illustrated in the following table:

<TABLE>
<CAPTION>
                                                        THREE MONTHS ENDED          NINE MONTHS ENDED
                                                           SEPTEMBER 30,              SEPTEMBER 30,
                                                       ---------------------    ------------------------
                                                         1996        1995          1996        1995
                                                       ---------   ---------    -----------  -----------
<S>                                                      <C>        <C>            <C>         <C>
Weighted average APR of loans securitized . . . . . .    14.77%     13.92%         14.34%      14.32%
Weighted average securitization rate  . . . . . . . .     6.74       6.05           6.39        6.59
                                                         ----       -----          -----       -----
Gross interest rate spread (1)  . . . . . . . . . . .     8.03%      7.87%          7.95%       7.73%
                                                         ----       -----          -----       -----
                                                         ----       -----          -----       -----

</TABLE>

-------------------
(1)  Before gains/losses on hedge transactions.

                                      10
<PAGE>

     As previously discussed, an increased proportion of higher yielding 
Classic loans resulted in a rise in the APR earned on loans purchased and 
subsequently securitized during both the three and nine months ended 
September 30, 1996.  A general market decline in consumer interest rates 
during early 1996 compared to early 1995, partially offset the impact of the 
higher yielding Classic loans during the nine months ended 1996.  Increases 
in the two-year Treasury rate as compared to the third quarter of 1995 
resulted in higher securitization costs during the third quarter of 1996, 
partially offsetting the favorable APR variance.  The company's weighted 
average securitization rate during the first nine months of 1996 was slightly 
lower than the same period of 1995 primarily due to a favorable two-year 
Treasury market during the first quarter of 1996.

     The unamortized balance of participations paid to dealers are expensed 
at the time the related loans are securitized and recorded as a reduction to 
the gain on sale.  Due to growth in volume of Classic loans, participations 
paid have decreased to 3.33% and 3.52% of the principal balance of loans 
purchased during the three and nine months ended September 30, 1996, 
respectively, compared with 4.26% and 4.16% during the same periods of 1995, 
respectively. The lower dealer participations resulted in an increased gain 
on sale.

     The Company's gain on sale of loans was further increased by $1.2 
million and $4.6 million of realized gains on hedging transactions during the 
three and nine months ended September 30, 1996, respectively, compared with 
$2.6 million and $10.1 million of realized losses during the same periods in 
1995.  There were no realized losses during the nine months ended September 
30, 1996 and no realized gains during the same period in 1995. 

     SERVICING FEE INCOME.  The Company's servicing fee income increased to 
$7.5 million during the three months ended September 30, 1996 from $3.9 
million in the same three months in 1995. For the nine months ended September 
30, 1996, servicing fee income was $19.8 million compared with $9.2 million 
for the same period in 1995.  The increase in servicing fee income was 
directly related to an increase in the average servicing portfolio 
outstanding. The following table reflects the growth in the Company's 
servicing portfolio from September 30, 1995 to September 30, 1996.

<TABLE>
<CAPTION>
(DOLLARS IN THOUSANDS, EXCEPT AS NOTED)                              AT SEPTEMBER 30,
                                                              -------------------------
                                                                   1996         1995
                                                              -----------  ------------
<S>                                                           <C>          <C>
Principal balance of automobile loans held for sale . . . .   $    21,104  $   105,352
Principal balance of loans serviced under securitizations .     3,373,470    1,788,290
                                                              -----------  ------------
Servicing portfolio . . . . . . . . . . . . . . . . . . . .   $ 3,394,574  $ 1,893,642
                                                              -----------  -----------
                                                              -----------  -----------
Average unpaid principal balance (actual dollars) . . . . .   $    12,537  $    12,078
Number of loans serviced  . . . . . . . . . . . . . . . . .       270,759      156,778

</TABLE>

     OTHER NON-INTEREST INCOME.  Other income rose to $1.4 million and $4.6 
million during the three and nine months ended September 30, 1996, 
respectively, compared with $0.4 million and $0.8 million, respectively, 
during the same periods in 1995.  This increase is primarily due to the 
introduction of late fee and insufficient funds charges to borrowers during 
late 1995.

     OPERATING EXPENSES.  During the three and nine months ended September 
30, 1996, salaries and benefits expense increased to $10.3 million and $28.2 
million, respectively, up 100% and 106% from $5.1 million and $13.7 million 
during the same periods in 1995, respectively. The increase in salaries and 
benefits is primarily attributable to an increase in the number of employees 
to 1,003 at September 30, 1996 from 544 at September 30, 1995, to accommodate 
the rise in loan purchasing volume and the subsequent servicing of such 
loans. 

                                      11
<PAGE>

     Other operating costs, including occupancy, depreciation and 
amortization, servicing and collection expenses increased to $13.1 million 
and $35.2 million during the three and nine months ended September 30, 1996, 
increases of 115% and 126%, respectively, compared with the same periods a 
year ago.  The increase in other operating costs reflects the continued 
growth in the Company's facilities, loan purchasing and servicing portfolio.

     Total annualized operating expenses as a percentage of average servicing 
portfolio also increased to 2.93% and 2.99% during the three and nine months 
ended September 30, 1996, compared to 2.64% and 2.90% in the same periods in 
1995.  The rise in operating expense percentage reflects the Company's 
expansion of its servicing facilities and personnel reflecting the growth in 
the Company's servicing portfolio and increased servicing needs and related 
costs associated with the rise in Classic loan volume.

     INTEREST EXPENSE.  Long-term debt and other interest expense increased 
to $6.7 million from $5.2 million during the three months ended September 30, 
1996 and 1995, respectively. For the nine months ended September 30, 1996, 
long-term debt and other interest expense was $18.6 million compared to $11.6 
million in the same period of 1995.  These increases are directly related to 
the issuance of $145.0 million of 13% Senior Notes in April 1995 and $30.0 
million of 10.125% Subordinated Notes in April 1996.

FINANCIAL CONDITION

     AUTOMOBILE LOANS HELD FOR SALE.  Prior to securitization, the Company 
holds automobile loans for sale in its portfolio.  The Company's portfolio of 
loans held for sale decreased 84% to $18.9 million at September 30, 1996 from 
$118.6 million at December 31, 1995 due to the timing in delivery of loans 
associated with the Company's securitizations.  At September 30, 1996, the 
Company had delivered $188.4 million of loans into a securitization trust for 
which the Company received cash from the trust for such loans concurrent with 
the legal closing of the transaction in October of 1996.  There were no loans 
delivered and pending a legal closing at December 31, 1995.

     DUE FROM SECURITIZATION TRUST.  Changes in due from securitization trust 
reflect the timing of delivery of loans into securitizations.  See discussion 
of AUTOMOBILE LOANS HELD FOR SALE above.

     FINANCE INCOME RECEIVABLE.  Finance income receivable increased to 
$430.0 million as of September 30, 1996, from $249.6 million at December 31, 
1995. This 72% increase is the result of an increase in loan securitization 
volume and related increase in gain on sale of loans.

     OTHER ASSETS.  Other assets increased to $17.9 million at September 30, 
1996 compared to $12.9 million at December 31, 1995.  This $5.0 million 
increase includes a $1.1 million increase in the Company's investment in 
subordinated certificates purchased in connection with 1996 securitization 
transactions and a $0.9 million rise in servicing fee receivable reflecting 
growth in the Company's servicing portfolio.  In addition, cash surrender 
value of life insurance policies increased $1.0 million since December 31, 
1995.

     SUBORDINATED NOTES.  See Liquidity - Principal Sources of Cash in 
Operating Activities.

                                      12
<PAGE>

     ACCOUNTS PAYABLE AND ACCRUED LIABILITIES.  Accounts payable and accrued 
liabilities increased to $20.1 million at September 30, 1996 compared to $9.8 
million at December 31, 1995.  This increase is primarily due to increased 
accruals for salary, occupancy and various operating expenses reflecting the 
continued growth in the Company's staffing, facilities, loan purchases and 
servicing portfolio.

DELINQUENCY, LOAN LOSS AND REPOSSESSION EXPERIENCE

     The following tables describe the Company's delinquencies, loan losses 
and repossessions for the periods indicated.  A delinquent loan may result in 
the repossession and foreclosure on the collateral for the loan.  Losses 
resulting from repossession and foreclosure of loans are charged against 
applicable allowances. 

<TABLE>
<CAPTION>
                                                                          SEPTEMBER 30,              DECEMBER 31,
DELINQUENCY EXPERIENCE (1):                                                   1996                       1995
                                                                     ----------------------   -----------------------
                                                                      NUMBER OF                NUMBER OF
                                                                        LOANS       BALANCE       LOANS      BALANCE
                                                                     ----------- ----------    ----------- ----------
<S>                                                                  <C>         <C>           <C>         <C>
(DOLLARS IN THOUSANDS)
Servicing portfolio at end of period                                 270,759     $3,394,574    185,241     $2,267,107
Delinquencies:
     31-60 days . . . . . . . . . . . . . . . . . . . . . . . .        2,948     $   35,785      1,536        $17,667
     61-90 days . . . . . . . . . . . . . . . . . . . . . . . .        1,014         12,851        520          5,694
     91 days or more  . . . . . . . . . . . . . . . . . . . . .        2,012         25,723        614          6,881
                                                                     ----------- ----------    ----------- ----------
Total automobile loans delinquent 31 or more days . . . . . . .        5,974     $   74,359      2,670      $  30,242
Delinquencies as a percentage of number of loans and amount
  outstanding at end of period (2)  . . . . . . . . . . . . . .         2.21%          2.19%      1.44%          1.33%
Amount in repossession (3)  . . . . . . . . . . . . . . . . . .        3,331      $  46,520      1,489      $  17,676
                                                                     ----------- ----------    ----------- ----------
Total delinquencies and amount in repossession (2)  . . . . . .        9,305      $ 120,879      4,159      $  47,918
                                                                     ----------- ----------    ----------- ----------
                                                                     ----------- ----------    ----------- ----------
Total delinquencies and amount in repossession as a percentage
  of servicing portfolio outstanding at end of period . . . . .         3.44%          3.56%      2.25%          2.11%

</TABLE>
------------------------------
(1)   All amounts and percentages are based on the principal amount
      scheduled to be paid on each loan.  The information in the table includes
      previously sold loans which the Company continues to service.

(2)   Amounts shown do not include loans which are less than 31 days delinquent.

(3)   Amount in repossession represents financed automobiles which have been
      repossessed but not yet liquidated.

                                      13
<PAGE>

<TABLE>
<CAPTION>
CREDIT LOSS/REPOSSESSION EXPERIENCE (1):                         THREE MONTHS ENDED               NINE MONTHS ENDED
                                                                    SEPTEMBER 30,                    SEPTEMBER 30,
                                                          -------------------------------    ----------------------------
                                                               1996             1995            1996           1995
                                                          -------------     -------------    -------------  -------------
<S>                                                        <C>                <C>              <C>            <C>
Average servicing portfolio outstanding during  
  the period . . . . . . . . . . . . . . . . . . . . . .    $3,194,633         $1,703,678      $2,822,414     $1,347,404
Average number of loans outstanding during the period  .       255,881            142,184         227,276        114,339
Number of repossessions  . . . . . . . . . . . . . . . .         3,884              1,253          10,146          2,420
Annualized repossessions as a percentage of average
  number of loans outstanding  . . . . . . . . . . . . .          6.07%              3.53%           5.95%          2.82%
Gross charge-offs (2)  . . . . . . . . . . . . . . . . .    $    9,432         $    3,324      $    22,994    $    7,124
Recoveries (3) . . . . . . . . . . . . . . . . . . . . .         1,842                255            4,448           587
                                                          -------------     -------------    -------------  -------------
Net losses . . . . . . . . . . . . . . . . . . . . . . .    $    7,590         $    3,069      $    18,546    $    6,537
                                                          -------------     -------------    -------------  -------------
                                                          -------------     -------------    -------------  -------------
Annualized gross charge-offs as a percentage of average
  servicing portfolio  . . . . . . . . . . . . . . . . .          1.18%              0.78%            1.09%         0.71%
Annualized net losses as a percentage of average
  servicing portfolio  . . . . . . . . . . . . . . . . .          0.95%              0.72%            0.88%         0.65%

</TABLE>
-------------------------------
(1)   All amounts and percentages are based on the principal amount
      scheduled to be paid on each loan.  The information in the table includes
      previously sold loans which the Company continues to service.

(2)   Gross charge-offs represent principal amounts which management estimated 
      to be uncollectable after the consideration of anticipated proceeds 
      from the disposition of repossessed assets and selling expenses.  When 
      estimating the value of repossessed inventory, management utilizes 
      industry published reports listing retail and  wholesale values of used
      automobiles and determines estimated proceeds within a range that 
      management believes reflects the then current market conditions and the
      Company's disposition strategy for such inventory.

(3)   Includes post-disposition amounts received on repossessed assets.

     The Company believes the rise in delinquency, repossession rates and 
annualized net losses reflected in the tables above are primarily due to the 
introduction and expansion of the Company's Classic loan program and the 
seasoning of the Company's servicing portfolio to include a greater 
proportion of loans in the period of highest probability for defaults.

     In February 1996, the Company elected to increase, over time depending 
on market conditions, the percentage of the Company's aggregate loan 
purchases that may be purchased through its Classic program up to a limit of 
50% of originations.  Through the first nine months of 1996, Classic loans 
represented 32% of total loan purchases compared with 16% during the same 
period in 1995. The purposes of the Company's increased emphasis on the 
Classic program are to provide the Company with the opportunity for greater 
interest rate spreads relative to its previous loan mix which management 
believes more than offsets any additional risks associated with the Classic 
loans and, as the Company offers lower dealer participations on Classic 
loans, to reduce origination costs in comparison to the Premier program.  The 
Company has determined that the pricing advantages and ability to expand the 
Company's prime lending market under the Classic loan program offsets 
anticipated increases in delinquency and repossession rates, which the 
Company expects to continue to increase as the Classic loans purchased 
continue to season.  To account for the anticipated increase in delinquency 
and repossession rates, the Company has established higher reserves following 
the introduction of the Classic program and has increased these reserves as 
the proportion of Classic loans has increased in the Company's total 
portfolio.  The Company's total reserves at September 30, 1996 were $81.3 
million or 2.40% of the Company's servicing portfolio compared to $24.5 
million or 1.30% at September 30, 1995.  Although the introduction and 
expansion of the Classic program has contributed to the increase in total 
portfolio delinquencies, repossession rates, and annualized net loss rates, 
these increases have been anticipated by management and are within the 
reserves established by the Company. 

                                      14
<PAGE>

LIQUIDITY

     The Company's business requires substantial cash to support its 
operating activities. The principal cash requirements include (i) amounts 
necessary to purchase and finance automobile loans pending securitization, 
(ii)  dealer participations, (iii) cash held from time to time in restricted 
spread accounts to support securitizations and other securitization expenses, 
(iv) interest advances to securitization trusts and (v) interest expense. The 
Company also uses significant amounts of cash for operating expenses.  Cash 
is returned to the Company principally from excess cash flow received from 
securitization trusts and from fees earned through servicing of loans held by 
such trusts.  The Company has operated on a negative operating cash flow 
basis and expects to continue to do so in the foreseeable future.  The 
Company has historically funded, and expects to continue to fund, these 
negative operating cash flows, subject to limitations in various debt 
covenants, principally through borrowings from financial institutions, sales 
of equity securities and sales of senior and subordinated notes, among other 
resources, although there can be no assurance that the Company will have 
access to capital markets in the future or that financing will be available 
to satisfy the Company's operating and debt service requirements or to fund 
its future growth. See "Capital Resources." 

PRINCIPAL USES OF CASH IN OPERATING ACTIVITIES

     PURCHASES AND FINANCING OF AUTOMOBILE LOANS.  Automobile loan purchases 
represent the Company's most significant cash flow requirement. The Company 
funds the purchase price of loans through the use of warehouse facilities. 
However, because advance rates under the warehouse facilities only provide 
funds for 90% to 99.9% of the principal balance of the loans, the Company is 
required to fund the remainder of all purchases with other available cash 
resources. The Company purchased $2.0 billion of loans during the first nine 
months of 1996 compared to $1.5 billion during the same period in 1995.

     DEALER PARTICIPATIONS.  Consistent with industry practice, the Company 
pays dealers participations for selling loans to the Company which typically 
require the Company to advance an up-front amount to dealers.  Participations 
paid by the Company to dealers during the nine months ended September 30, 
1996 were $70.8 million, or approximately 3.52% of the principal balance of 
loans purchased, compared with $60.9 million, or approximately 4.16% of loans 
purchased, during the same period in 1995.  The decrease in dealer 
participation as a percentage of loans purchased reflects the growth in 
volume of Classic loans.

     SECURITIZATION OF AUTOMOBILE LOANS.  In connection with securitizations, 
the Company is required to fund spread accounts related to each transaction. 
The Company funds these spread accounts by foregoing receipt of excess cash 
flow until these spread accounts exceed predetermined levels.  The Company 
had $122.1 million of restricted cash in spread accounts at September 30, 
1996, compared with $65.4 million at December 31, 1995.  Restricted cash is 
included as a component of finance income receivable.

                                      15
<PAGE>

     The Company also incurs certain expenses in connection with 
securitizations, including underwriting fees, credit enhancement fees, 
trustee fees and other costs, which approximate 0.5% per annum of the 
principal amount of the asset-backed securities sold into the 
securitizations. 

     NET INTEREST MARGIN.  Although the Company records net interest margin 
as earned, the interest income component is generally received in cash from 
excess cash flow, while the interest expense component (primarily warehousing 
interest) is paid prior to securitization. 

     ADVANCES DUE TO SERVICER.  As the servicer of loans sold in 
securitizations, the Company periodically makes interest advances to the 
securitization trusts to provide for temporary delays in the receipt of 
required interest payments by borrowers. In accordance with servicing 
agreements, the Company makes advances only in the event it expects to 
recover them through the ultimate payments from the obligor on the loan. 

PRINCIPAL SOURCES OF CASH IN OPERATING ACTIVITIES

     EXCESS CASH FLOW.  The Company receives excess cash flow from 
securitization trusts, including the realization of gain on sale, the 
recovery of dealer participations, and the recovery of accrued interest 
receivable earned, but not yet collected, on loans held for sale. Recovery of 
dealer participations and accrued interest receivable, which occur throughout 
the life of the securitization, result in a reduction of the finance income 
receivable and, because they have been considered in the original 
determination of the gain on sale of loans, have no effect on the Company's 
results of operations in the year in which the participations and interest 
are recovered from the securitization trust. During the first nine months of 
1996, the Company received $28.9 million of excess cash flow, compared with 
$15.3 million during the same nine months in 1995.  Included in excess cash 
flows during 1995, is approximately $1.7 million of cash received from the 
sale of interest-only securities related to securitization transactions.  
There were no interest-only securities issued during the first nine months on 
1996.  The Company received an additional $2.5 million of cash during the 
first nine months of 1996 which was released from spread accounts associated 
with three securitization transactions closed-out during the first quarter of 
1996. 

     SERVICING FEES.  The Company also receives servicing fee income with 
respect to loans held by securitization trusts equal to 1% per annum of the 
remaining principal balance.  During the nine months ended September 30, 1996 
and 1995, the Company received cash for such servicing in the amount of $18.9 
million and $8.2 million, respectively.  Servicing fee income is reflected in 
the Company's revenues as earned. 

CAPITAL RESOURCES

     The Company finances the acquisition of automobile loans primarily 
through (i) warehouse facilities, pursuant to which loans are sold or 
financed generally on a temporary basis and (ii) the securitization of loans, 
pursuant to which loans are sold as asset-backed securities. Additional 
financing is required to fund the Company's operations.

                                      16
<PAGE>

     WAREHOUSE FACILITIES.  Automobile loans held for sale are funded 
primarily through warehouse facilities.  Currently, the Company has an 
aggregate capacity in its warehouse facilities of $700.0 million, of which 
$661.5 million was available at September 30, 1996.  The warehouse facilities 
are subject to renewal on mutually acceptable terms upon the expiration of 
each facility ranging from December 1996 to July 1997.

     SECURITIZATION PROGRAM.  The most important capital resource for the 
Company has been its ability to sell automobile loans in the secondary 
markets through securitizations. The following table summarizes the Company's 
securitization transactions for the nine months ended September 30, 1996, all 
of which were publicly issued and rated "AAA/Aaa". 

<TABLE>
<CAPTION>

(DOLLARS IN THOUSANDS)
                                                                 REMAINING 
                                           REMAINING             BALANCE AS
                                           BALANCE AS                A             CURRENT        WEIGHTED         GROSS 
                                              OF                 PERCENTAGE        WEIGHTED       AVERAGE         INTEREST 
                        ORIGINAL          SEPTEMBER 30,          OF ORIGINAL       AVERAGE     SECURITIZATION       RATE 
DATE                    BALANCE              1996                 BALANCE            APR           RATE            SPREAD
--------------------  ------------    --------------------   -----------------   ------------ ----------------   -----------
<S>                   <C>             <C>                    <C>                 <C>          <C>                <C>

March 1996             $  600,000         $  485,403              80.90%             13.79%        5.81%             7.98%
June 1996                 650,000            591,612              91.02%             14.49%        6.62%             7.87%
September 1996 (1)        725,000            687,556              94.84%             14.67%        6.75%             7.92%
                       ----------         ----------
                       $1,975,000         $1,764,571
                       ----------         ----------
                       ----------         ----------
</TABLE>

-------------------
 (1) As of September 30, 1996, the Company had delivered $697.4 million to the 
     trust and $27.6 million cash remained in the pre-funded portion of the 
     trust.
 
OTHER CAPITAL RESOURCES

     Historically, the Company has utilized various debt and equity 
financings to offset negative operating cash flows and support the continued 
growth in loan volume, increased dealer participations, securitizations and 
general operating expenses. 

     In April 1996, the Company sold to the public 8,050,000 shares of Common 
Stock.  Net proceeds received from the offering of Common Stock approximated 
$146.0 million.

     In March 1996, the Company sold to the public $30.0 million aggregate 
principal amount of 10.125% Subordinated Notes Series 1996-A, due 2001 (the 
"Senior Subordinated Notes").  Net proceeds received from the offering of 
Senior Subordinated Notes approximated $29.0 million.

     The terms of the Company's 13% Senior Term Note Indenture (the 
"Indenture") limit the incurrence of additional indebtedness by the Company 
and restrict certain payments, including dividends on common or preferred 
stock (other than dividends on the Company's 8% Cumulative Convertible 
Exchangeable Preferred Stock) subject to the Company's ability to meet 
certain tests as set forth in the Indenture.  If the Company's Fixed Charge 
Coverage Ratio, as defined in the Indenture, is less than 2.0 to 1 for a four 
quarter period, the Company is restricted from paying dividends on common and 
preferred stock (other than dividends on its 8% Cumulative Convertible 
Exchangeable Preferred Stock) and unable to incur additional indebtedness 
(excluding indebtedness under warehouse facilities).  The Fixed Charge 
Coverage Ratio for the four-quarter period ended September 30, 1996 was:

                                   17

<PAGE>

<TABLE>
<CAPTION>

                                                                   FOR THE FOUR 
                                                                  QUARTERS ENDED
                                                                SEPTEMBER 30, 1996
                                                              ----------------------
<S>                                                            <C>
(IN THOUSANDS)
Operating Cash Receipts:
Excess cash flows received from securitization trusts.........      $  34,589
Servicing fee income..........................................         23,339
Other cash income.............................................          5,035
                                                                    ---------
    Total Operating Cash Receipts.............................         62,963
Less Cash Expenses:
  Payment of dealer participations............................         96,359
  Cash operating expenses.....................................         82,175
  Interest paid on warehouse and other debt...................         32,035
  Preferred dividends.........................................          1,898
                                                                    ---------
    Total Cash Expenses.......................................        212,467
Consolidated Cash Flow........................................       (149,504)
Fixed Charges included in Cash Expenses.......................         33,933
                                                                    ---------
  Adjusted Consolidated Cash Flow.............................      $(115,571)
                                                                    ---------
                                                                    ---------
Fixed Charges:
  Interest expense (accrued or paid)..........................      $  34,052
  Preferred dividends.........................................          1,898
                                                                    ---------
    Total Fixed Charges.......................................      $  35,950
                                                                    ---------
                                                                    ---------

</TABLE>

     The Company has had, and expects to continue to have, negative 
Consolidated Cash Flow (as defined in the Indenture) and does not expect to 
be able to meet the Fixed Charge Coverage Ratio test for the foreseeable 
future.

     The Company may incur additional indebtedness under the terms of the 
Indenture, without regard to the Fixed Charge Coverage Ratio, if total 
indebtedness (excluding indebtedness under warehouse facilities) would not 
exceed 200% of Consolidated Net Worth (as defined in the Indenture).  As of 
September 30, 1996, the Company would be able to incur additional 
indebtedness under the Consolidated Net Worth test, provided that such new 
indebtedness has a Weighted Average Life to Maturity (as defined in the 
Indenture) equal to or longer than the Senior Term Notes.

                                  18

<PAGE>

PART II - OTHER INFORMATION

Item 1.   Legal Proceedings
          The Company is party to litigation in the ordinary course of 
          business, generally involving actions against borrowers to
          collect amounts on loans or recover vehicles.  The Company does not
          expect any pending proceedings to have a material adverse effect on
          the Company or its results of operations.

Item 2.   Changes in Securities
          None

Item 3.   Defaults Upon Senior Securities
          None

Item 4.   Submission of Matters to a Vote of Security Holders
          None

Item 5.   Other Information
          On August 26, 1996, the Company announced that it had received an
          unsolicited indication of interest to buy the Company.  In connection
          with this development, the Company engaged Donaldson, Lufkin & 
          Jenrette Securities Corporation ("DLJ") to assist the Board of 
          Directors (the "Board") in examining the strategic alternatives 
          available to the Company.

          On the same day, the Board accepted the resignation of Jeffrey C. Mack
          as Chairman, President, Chief Executive Officer and member of
          the Board due to philosophical differences with the Board.  The
          Board appointed Warren Kantor, who was then serving as a member of the
          Board, to be Chairman of the Executive Committee and announced that
          Scott Anderson, Vice Chairman, Credit Administration and
          Operations, would continue to oversee the day-to-day operations
          of the Company.

          The Board has created a committee to conduct a national search for a
          new Chief Executive Officer and has retained an executive search
          firm to assist the committee in its effort.

          On October 16, 1996, the Company announced that the party that had
          indicated an interest in buying the Company and certain other 
          interested parties had elected not to make definitive offers.  The 
          Company also announced that, assisted by DLJ, it would continue to 
          examine strategic alternatives available to it.  The Company 
          indicated that any proposal would be evaluated in light of market 
          conditions that prevail at the time of the proposal, and that the 
          Board had not set a specific price range or terms for an acceptable
          proposal.  There can be no assurance given that the Company will 
          receive any acceptable proposals to buy the Company.

          On November 4, 1996, the Company announced that the Board of Directors
          has adopted a Shareholder Rights Plan in which preferred stock 
          purchase Rights will be distributed as a dividend at the rate of one 
          Right for each share of the Company's Common Stock held as of the 
          close of business on November 22, 1996.  The Rights will expire on 
          October 28, 2006.

                                       19

<PAGE>

Item 6.   Exhibits and Reports on Form 8-K

(a)  EXHIBITS       

     The following exhibits are filed in response to Item 601 of Regulation S-K.

     EXHIBIT NO.   DESCRIPTION
     -----------   -----------

        3.1        Restated Articles of Incorporation of Registrant, as amended
                   (incorporated by reference to Exhibit 4.1 to Registrant's 
                   Registration Statement on Form S-2, File No. 33-90108).

        3.2        Bylaws of Registrant, as amended (incorporated by reference 
                   to Exhibit 3.2 to Registrant's Registration Statement on 
                   Form S-18, File No. 33-433270c, and to Registrant's Current 
                   Report on Form 8-K, dated September 30, 1996).

        10.1       Series 1996-C Supplement, dated as of September 12, 1996, 
                   to Spread Account Agreement, dated as of March 25, 1995, 
                   as amended and restated as of December 6, 1995, among 
                   Registrant, Olympic Receivables Finance Corp., Financial 
                   Security Assurance Inc. and Norwest Bank Minnesota, National 
                   Association, as Trustee and Collateral Agent.

        10.2       Insurance and Indemnity Agreement, dated as of September 12,
                   1996, among Registrant, Financial Security Assurance Inc., 
                   Olympic Automobile Receivables Trust, 1996-C, Olympic First 
                   GP, Inc., Olympic Second GP, Inc. and Olympic Receivables 
                   Finance Corp.

        10.3       Amendment, dated as of September 12, 1996, among Olympic 
                   Financial Ltd., Olympic Receivables Finance Corp., Financial
                   Security Assurance Inc., and Norwest Bank Minnesota, 
                   National Association, as Collateral Agent, to Series 1996-B
                   Supplement, dated as of June 14, 1996, Series 1996-A 
                   Supplement, dated as of March 14, 1996, Series 1995-E
                   Supplement, dated as of December 6, 1995, Series 1995-D
                   Supplement, dated as of September 21, 1995, as amended by 
                   that certain Amendment to Series Supplements to Spread 
                   Account Agreement, dated as of December 6, 1995, 
                   Series 1995-C Supplement, dated as of June 15, 1995, as 
                   amended by that certain Amendment to Series Supplements 
                   to Spread Account Agreement, dated as of September 21,  
                   1995, and as further amended by the December 1995 Amendment,
                   Series 1995-B Supplement, dated as of March 15, 1995, as 
                   amended by that certain Amendment to Series Supplements to 
                   Spread Account Agreement, dated as of June 15, 1995, as 
                   further amended by the September 1995 Amendment, and as 
                   further amended by the December 1995 Amendment to
                   the Spread Account Agreement, dated as of March 25, 1993, 
                   as amended and restated as of December 6, 1994, among  
                   Registrant, Olympic Automobile Receivables Trust, Financial 
                   Security and Norwest Bank Minnesota, National Association 
                   as Trustee and as Collateral Agent.

                                            20

<PAGE>

        10.4       Amendment to Insurance and Indemnity Agreement, dated as of 
                   June 14, 1996, Insurance and Indemnity Agreement, dated as 
                   of March 14, 1996, Insurance and Indemnity Agreement, dated 
                   as of December 5, 1995, Insurance and Indemnity Agreement, 
                   dated as of September 21, 1995, as amended by that certain 
                   Amendment No. 2 to Insurance and Indemnity Agreements, dated 
                   as of December 6, 1995, Insurance and Indemnity Agreement, 
                   dated as of June 15, 1995, as amended by Amendment No. 2, 
                   Insurance and Indemnity Agreement, dated as of March 15, 
                   1995, as amended by that certain Amendment No. 1 to Insurance
                   and Indemnity Agreements, dated as of June 15, 1996, and as 
                   further amended by Amendment No. 2, Insurance and Indemnity
                   Agreement, dated as of February 9, 1995, as amended by 
                   Amendment No. 2, and as further amended by Amendment No. 2,
                   dated as of May 31, 1996, among Financial Security Assurance 
                   Inc., Olympic Automobile Receivables Trust, 1996-A, Olympic 
                   Automobile Receivables Trust, 1995-E, Olympic Automobile 
                   Receivables Trust, 1995-D, Olympic Automobile Receivables 
                   Trust, 1995-C, Olympic Automobile Receivables Trust, 1995-B, 
                   Olympic Automobile Receivables Trust, 1995-A, Olympic First 
                   GP Inc., Olympic Second GP Inc., Olympic Receivables Finance 
                   Corp., and Olympic Financial Ltd., in each case with respect 
                   to each Insurance and Indemnity Agreement with respect to 
                   which such person is a party.

        10.5       Spread Account Agreement, dated as of March 25, 1993, as 
                   amended and restated as of September 12, 1996, among Olympic
                   Financial Ltd., Olympic Receivables Financial Corp., 
                   Financial Security Assurance Inc. and Norwest Bank 
                   Minnesota, National Association, as Trustee and as Collateral
                   Agent.

        10.6       Olympic Financial Ltd. Employee Bonus Plan.

        11.1       Computation of Earnings Per Share  

        12.1       Computation of Ratio Earnings to Fixed Charges

        12.2       Computation of Ratio Earnings to Fixed Charges and 
                   Preferred Stock Dividends      

        27.1       Financial Data Schedule

                                           21

<PAGE>

(b)  REPORTS ON FORM 8-K
     
     The Company filed a current report on Form 8-K, filed and dated August 
26, 1996, announcing that its Board of Directors has received an indication 
of interest to buy the Company and that the Company has engaged Donaldson, 
Lufkin and Jenrette to assist the Board in examining the strategic 
alternatives available.  The Company further announced that Warren Kantor has 
been appointed Chairman of the Company's Executive Committee and that the 
Board has accepted the resignation of Jeffrey C. Mack as President and Chief 
Executive Officer of the Company.

     On October 7, 1996, the Company filed a current report on Form 8-K, 
dated September 30, 1996, announcing an amendment to Section 4.1 of the 
Company's Bylaws defining the officers of the Company.

                                       22

<PAGE>

                                   SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the 
registrant has duly caused this report to be signed on its behalf by the 
undersigned, thereunto duly authorized.

                               OLYMPIC FINANCIAL LTD.



 SIGNATURE                                   TITLE                  DATE 
--------------------------------     ----------------------  -------------------
 
 /s/ Warren Kantor 
 -------------------------------
 Warren Kantor                           Acting Chief         November 11, 1996 
                                      Executive Officer, 
                                          Chairman of 
                                      Executive Committee 
                                         and Director 
 
 
 /s/  John A. Witham 
 -------------------------------
 John A. Witham                         Executive Vice        November 11, 1996 
                                       President and Chief 
                                       Financial Officer 
                                          (Principal 
                                      Financial Officer) 
 
 /s/  Brian S. Anderson 
 -------------------------------
 Brian S. Anderson                        Senior Vice         November 11, 1996 
                                          President, 
                                           Corporate 
                                        Controller and 
                                      Assistant Secretary 
                                          (Principal 
                                      Accounting Officer) 

                                              23
<PAGE>

                                     EXHIBIT INDEX

     EXHIBIT NO.   DESCRIPTION
     -----------   -----------

        3.1        Restated Articles of Incorporation of Registrant, as amended
                   (incorporated by reference to Exhibit 4.1 to Registrant's 
                   Registration Statement on Form S-2, File No. 33-90108).

        3.2        Bylaws of Registrant, as amended (incorporated by reference 
                   to Exhibit 3.2 to Registrant's Registration Statement on 
                   Form S-18, File No. 33-433270c, and to Registrant's Current 
                   Report on Form 8-K, dated September 30, 1996).

        10.1       Series 1996-C Supplement, dated as of September 12, 1996, to 
                   Spread Account Agreement, dated as of March 25, 1995, as 
                   amended and restated as of December 6, 1995, among 
                   Registrant, Olympic Receivables Finance Corp., Financial 
                   Security Assurance Inc. and Norwest Bank Minnesota, National 
                   Association, as Trustee and Collateral Agent.

        10.2       Insurance and Indemnity Agreement, dated as of September 12, 
                   1996, among Registrant, Financial Security Assurance Inc., 
                   Olympic Automobile Receivables Trust, 1996-C, Olympic First 
                   GP, Inc., Olympic Second GP, Inc. and Olympic Receivables 
                   Finance Corp.

        10.3       Amendment, dated as of September 12, 1996, among Olympic 
                   Financial Ltd., Olympic Receivables Finance Corp., Financial
                   Security Assurance Inc., and Norwest Bank Minnesota, 
                   National Association, as Collateral Agent, to Series 1996-B 
                   Supplement, dated as of June 14, 1996, Series 1996-A 
                   Supplement, dated as of March 14, 1996, Series 1995-E
                   Supplement, dated as of December 6, 1995, Series 1995-D
                   Supplement, dated as of September 21, 1995, as amended by 
                   that certain Amendment to Series Supplements to Spread 
                   Account Agreement, dated as of December 6, 1995, 
                   Series 1995-C Supplement, dated as of June 15, 1995, as 
                   amended by that certain Amendment to Series Supplements 
                   to Spread Account Agreement, dated as of September 21, 1995, 
                   and as further amended by the December 1995 Amendment, 
                   Series 1995-B Supplement, dated as of March 15, 1995, as 
                   amended by that certain Amendment to Series Supplements to 
                   Spread Account Agreement, dated as of June 15, 1995, as 
                   further amended by the September 1995 Amendment, and as 
                   further amended by the December 1995 Amendment to the 
                   Spread Account Agreement, dated as of March 25, 1993, as 
                   amended and restated as of December 6, 1994, among 
                   Registrant, Olympic Automobile Receivables Trust, 
                   Financial Security and Norwest Bank Minnesota, National 
                   Association as Trustee and as Collateral Agent.

                                           24

<PAGE>


        10.4       Amendment to Insurance and Indemnity Agreement, dated as of 
                   June 14, 1996, Insurance and Indemnity Agreement, dated as of
                   March 14, 1996, Insurance and Indemnity Agreement, dated as 
                   of December 5, 1995, Insurance and Indemnity Agreement, 
                   dated as of September 21, 1995, as amended by that certain 
                   Amendment No. 2 to Insurance and Indemnity Agreements, dated 
                   as of December 6, 1995, Insurance and Indemnity Agreement, 
                   dated as of June 15, 1995, as amended by Amendment No. 2, 
                   Insurance and Indemnity Agreement, dated as of March 15, 
                   1995, as amended by that certain Amendment No. 1 to Insurance
                   and Indemnity Agreements, dated as of June 15, 1996, and as 
                   further amended by Amendment No. 2, Insurance and Indemnity 
                   Agreement, dated as of February 9, 1995, as amended by 
                   Amendment No. 2, and as further amended by Amendment No. 2,
                   dated as of May 31, 1996, among Financial Security Assurance 
                   Inc., Olympic Automobile Receivables Trust, 1996-A, Olympic 
                   Automobile Receivables Trust, 1995-E, Olympic Automobile 
                   Receivables Trust, 1995-D, Olympic Automobile Receivables 
                   Trust, 1995-C, Olympic Automobile Receivables Trust, 
                   1995-B, Olympic Automobile Receivables Trust, 1995-A, Olympic
                   First GP Inc., Olympic Second GP Inc., Olympic Receivables 
                   Finance Corp., and Olympic Financial Ltd., in each case with
                   respect to each Insurance and Indemnity Agreement with 
                   respect to which such person is a party.

        10.5       Spread Account Agreement, dated as of March 25, 1993, as 
                   amended and restated as of September 12, 1996, among 
                   Olympic Financial Ltd., Olympic Receivables Financial Corp.,
                   Financial Security Assurance Inc. and Norwest Bank Minnesota,
                   National Association, as Trustee and as Collateral Agent.

        10.6       Olympic Financial Ltd. Employee Bonus Plan.

        11.1       Computation of Earnings Per Share  

        12.1       Computation of Ratio Earnings to Fixed Charges

        12.2       Computation of Ratio Earnings to Fixed Charges and 
                   Preferred Stock Dividends      

        27.1       Financial Data Schedule

                                          25