================================================================================

                                  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

                  For the quarterly period ended October 31, 2009

                                       OR

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

              For the transition period from__________ to __________

                        Commission file number 001-14237

                          FINANCIAL FEDERAL CORPORATION
             (Exact name of Registrant as specified in its charter)

           Nevada                                     88-0244792
  (State of incorporation)               (I.R.S. Employer Identification No.)

                   730 Third Avenue, New York, New York 10017
                    (Address of principal executive offices)

        Registrant's telephone number, including area code (212) 599-8000

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 [ ]

Indicate  by check mark whether each registrant has submitted electronically and
posted  on its corporate Web  site every  Interactive Data  File required  to be
submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding
12 months (or for such shorter period that the registrant was required to submit
and post such files). Yes [ ] No [ ]

Indicate by check mark whether the registrant  is a large  accelerated filer, an
accelerated filer, a non-accelerated filer or  a smaller reporting  company. See
the  definitions of "large accelerated filer," "accelerated filer"  and "smaller
reporting company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer [X]    Accelerated filer [ ]   Non-accelerated filer [ ]
Smaller reporting company [ ]

Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Act). Yes [ ] No [X]

The number of shares outstanding of the registrant's common stock on December 1,
2009 was 26,293,315.

================================================================================

<PAGE>

                 FINANCIAL FEDERAL CORPORATION AND SUBSIDIARIES

                          Quarterly Report on Form 10-Q
                     for the quarter ended October 31, 2009

                                TABLE OF CONTENTS

Part I - Financial Information                                          Page No.
---------------------------------------------------------------------   --------

Item 1.   Financial Statements:

          Consolidated Balance Sheets at October 31, 2009 (unaudited)
             and July 31, 2009 (audited)                                   1

          Consolidated Income Statements for the three months ended
             October 31, 2009 and 2008 (unaudited)                         2

          Consolidated Statements of Changes in Stockholders' Equity
             for the three months ended October 31, 2009 and 2008
             (unaudited)                                                   3

          Consolidated Statements of Cash Flows for the three months
             ended October 31, 2009 and 2008 (unaudited)                   4

          Notes to Consolidated Financial Statements (unaudited)           5-12

Item 2.   Management's Discussion and Analysis of Financial
             Condition and Results of Operations                          13-22

Item 3.   Quantitative and Qualitative Disclosures about Market Risk      22

Item 4.   Controls and Procedures                                         22


Part II - Other Information
---------------------------------------------------------------------

Item 5.   Other Information                                               23

Item 6.   Exhibits                                                        23

Signatures                                                                24

<PAGE>

PART I - FINANCIAL INFORMATION

Item 1.   Financial Statements

                 FINANCIAL FEDERAL CORPORATION AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS
                        (In thousands, except par value)

<TABLE>
<CAPTION>
===========================================================================================
                                                          October 31, 2009    July 31, 2009*
===========================================================================================
                                                               (Unaudited)

<S>                                                            <C>            <C>
ASSETS
Finance receivables                                            $ 1,410,964      $ 1,536,398
Allowance for credit losses                                        (25,028)         (25,007)
-------------------------------------------------------------------------------------------
   Finance receivables - net                                     1,385,936        1,511,391
Cash                                                                 9,463            8,038
Other assets                                                        34,160           28,685
-------------------------------------------------------------------------------------------
      TOTAL ASSETS                                             $ 1,429,559      $ 1,548,114
===========================================================================================

LIABILITIES
Debt:
   Long-term ($6,600 at October 31, 2009 and $5,400 at
      July 31, 2009 owed to related parties)                   $   739,200      $   932,000
   Short-term                                                      185,800          120,000
Accrued interest, taxes and other liabilities                       41,249           44,068
-------------------------------------------------------------------------------------------
   Total liabilities                                               966,249        1,096,068
-------------------------------------------------------------------------------------------

STOCKHOLDERS' EQUITY
Preferred stock - $1 par value, authorized 5,000 shares                 --               --
Common stock - $.50 par value, authorized 100,000 shares,
   shares issued and outstanding (net of 1,696 treasury
   shares): 26,257 at October 31, 2009 and 25,889 at
   July 31, 2009                                                    13,129           12,945
Additional paid-in capital                                         162,761          159,501
Retained earnings                                                  287,975          281,604
Accumulated other comprehensive loss                                  (555)          (2,004)
-------------------------------------------------------------------------------------------
   Total stockholders' equity                                      463,310          452,046
-------------------------------------------------------------------------------------------
      TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY               $ 1,429,559      $ 1,548,114
===========================================================================================
</TABLE>

*   Restated for the retrospective application of FASB ASC 470-20, "Accounting
    for Convertible Debt Instruments That May Be Settled in Cash upon Conversion
    (Including Partial Cash Settlements)." See Note 1.

See accompanying notes to consolidated financial statements

                                       1
<PAGE>

                 FINANCIAL FEDERAL CORPORATION AND SUBSIDIARIES

                         CONSOLIDATED INCOME STATEMENTS
                    (In thousands, except per share amounts)
                                   (Unaudited)

<TABLE>
<CAPTION>
===========================================================================================
Three Months Ended October 31,                                         2009            2008*
===========================================================================================
<S>                                                                 <C>             <C>
Finance income                                                      $33,138         $42,993
Interest expense                                                      8,666          16,286
-------------------------------------------------------------------------------------------

   Net finance income before provision for credit
      losses on finance receivables                                  24,472          26,707

Provision for credit losses on finance receivables                    2,500           1,400
-------------------------------------------------------------------------------------------

   Net finance income                                                21,972          25,307

Gain on debt retirement                                               2,400              --
Salaries and other expenses                                          (7,721)         (7,169)
-------------------------------------------------------------------------------------------

   Income before provision for income taxes                          16,651          18,138

Provision for income taxes                                            6,349           7,059
-------------------------------------------------------------------------------------------

      NET INCOME                                                    $10,302         $11,079
===========================================================================================

EARNINGS PER COMMON SHARE:
      Diluted                                                       $  0.41         $  0.44
===========================================================================================
      Basic                                                         $  0.39         $  0.43
===========================================================================================
</TABLE>

*  Restated for the retrospective application of FASB ASC 470-20 and FASB ASC
   260-10 "Determining Whether Instruments Granted in Share-Based Payment
   Transactions Are Participating Securities." See Note 1.

See accompanying notes to consolidated financial statements

                                       2
<PAGE>

                 FINANCIAL FEDERAL CORPORATION AND SUBSIDIARIES

          CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY *
                                 (In thousands)
                                   (Unaudited)

<TABLE>
<CAPTION>
====================================================================================================
                                                                              Accumulated
                                     Common Stock   Additional                      Other
                                 ----------------      Paid-In   Retained   Comprehensive
                                 Shares    Amount      Capital   Earnings            Loss      Total
====================================================================================================
<S>                              <C>      <C>         <C>        <C>              <C>       <C>
BALANCE - JULY 31, 2008          25,673   $12,836     $150,490   $255,726         $(2,480)  $416,572
 Net income                          --        --           --     11,079              --     11,079
 Reclassification of realized
  net loss in net income,
  after $76 of tax                   --        --           --         --             121        121
                                                                                            --------
     Comprehensive income                                                                     11,200
                                                                                            --------
 Stock repurchased (retired)         (4)       (2)         (81)        --              --        (83)
 Stock plan activity:
  Shares issued                     170        85          369         --              --        454
  Compensation recognized            --        --        2,004         --              --      2,004
  Tax shortfall                      --        --          (13)        --              --        (13)
 Common stock cash dividends         --        --           --     (3,861)             --     (3,861)
----------------------------------------------------------------------------------------------------
BALANCE - OCTOBER 31, 2008       25,839  $ 12,919    $ 152,769  $ 262,944         $(2,359) $ 426,273
====================================================================================================
</TABLE>

<TABLE>
<CAPTION>
====================================================================================================
                                                                              Accumulated
                                     Common Stock   Additional                      Other
                                 ----------------      Paid-In   Retained   Comprehensive
                                 Shares    Amount      Capital   Earnings            Loss      Total
====================================================================================================
<S>                              <C>      <C>         <C>        <C>              <C>       <C>
BALANCE - JULY 31, 2009          25,889   $12,945     $159,501   $281,604         $(2,004)  $452,046
 Net income                          --        --           --     10,302              --     10,302
 Reclassification of realized
  net loss in net income,
  after $914 of tax                  --        --           --         --           1,449      1,449
                                                                                            --------
     Comprehensive income                                                                     11,751
                                                                                            --------
 Stock plan activity:
  Shares issued                     368       184        1,338         --              --      1,522
  Compensation recognized            --        --        1,922         --              --      1,922
 Common stock cash dividends         --        --           --     (3,931)             --     (3,931)
----------------------------------------------------------------------------------------------------
BALANCE - OCTOBER 31, 2009       26,257   $13,129     $162,761   $287,975          $ (555)  $463,310
====================================================================================================
</TABLE>

*  Restated for the retrospective application of FASB ASC 470-20.  See Note 1.

See accompanying notes to consolidated financial statements

                                       3
<PAGE>

                 FINANCIAL FEDERAL CORPORATION AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In thousands)
                                   (Unaudited)

<TABLE>
<CAPTION>
===========================================================================================
Three Months Ended October 31,                                         2009            2008*
===========================================================================================
<S>                                                               <C>             <C>
Cash flows from operating activities:
  Net income                                                      $  10,302       $  11,079
    Adjustments to reconcile net income to net cash provided
     by operating activities:
       Amortization of deferred origination costs and fees            4,125           4,463
       Provision for credit losses on finance receivables             2,500           1,400
       Stock-based compensation                                       1,114           1,186
       Depreciation and amortization                                    165             382
       Amortization of debt discount on convertible debentures           --             900
       Gain on debt retirement                                       (2,400)             --
       Decrease in other assets                                       2,043             379
       Decrease in accrued interest, taxes and other liabilities     (3,733)         (3,458)
       Tax shortfall from stock-based awards                             --              13
-------------------------------------------------------------------------------------------
           Net cash provided by operating activities                 14,116          16,344
-------------------------------------------------------------------------------------------
Cash flows from investing activities:
  Finance receivables originated                                    (64,122)       (225,007)
  Finance receivables collected and repossessed assets sales
    proceeds                                                        176,040         273,253
-------------------------------------------------------------------------------------------
           Net cash provided by investing activities                111,918          48,246
-------------------------------------------------------------------------------------------
Cash flows from financing activities:
  Bank borrowings, net increase                                     175,600           8,000
  Commercial paper, net decrease                                    (14,800)        (49,000)
  Repayments of term asset securitization borrowings                (13,000)        (18,000)
  Repayments of term notes                                         (270,000)             --
  Proceeds from stock option exercises                                1,522             454
  Common stock cash dividends                                        (3,931)         (3,861)
  Common stock repurchased                                               --             (83)
  Tax shortfall from stock-based awards                                  --             (13)
-------------------------------------------------------------------------------------------
           Net cash used in financing activities                   (124,609)        (62,503)
-------------------------------------------------------------------------------------------
NET INCREASE IN CASH                                                  1,425           2,087
Cash - beginning of period                                            8,038           8,232
-------------------------------------------------------------------------------------------
CASH - END OF PERIOD                                              $   9,463       $  10,319
===========================================================================================
</TABLE>

*  Restated for the retrospective application of FASB ASC 470-20.  See Note 1.

See accompanying notes to consolidated financial statements

                                       4
<PAGE>

                 FINANCIAL FEDERAL CORPORATION AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                (Dollars in thousands, except per share amounts)
                                   (Unaudited)


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Description of Business

     Financial Federal Corporation ("FFC") is a holding company operating
primarily through one subsidiary to provide collateralized lending, financing
and leasing services nationwide to small and medium sized businesses in the
general construction, road and infrastructure construction and repair, road
transportation and refuse industries. We lend against, finance and lease a wide
range of new and used revenue-producing, essential-use equipment including
cranes, earthmovers, personnel lifts, trailers and trucks.

Subsequent Event

     On November 22, 2009, we entered into an Agreement and Plan of Merger with
People's United Financial, Inc. ("People's"), the holding company for People's
United Bank, to be acquired by People's. The merger must be approved by our
stockholders and is subject to other customary closing conditions. The merger is
expected to close in the third quarter of fiscal 2010 and our stockholders will
receive $11.27 in cash and one share of People's common stock for each share of
our common stock under the terms of the merger agreement.

Basis of Presentation and Principles of Consolidation

     We prepared the accompanying Consolidated Financial Statements according to
accounting principles generally accepted in the United States of America (GAAP).
We eliminated all significant intercompany accounts and transactions. We do not
have reportable operating segments. We have two fully consolidated special
purpose entities for our on-balance-sheet asset securitization facilities. We
evaluated subsequent events through December 8, 2009; the date we issued the
consolidated financial statements.

     The Financial Accounting Standards Board ("FASB") implemented the FASB
Accounting Standards Codification ("ASC") on July 1, 2009. The FASB ASC is a
major restructuring of accounting standards and is now the only source of GAAP.
It replaced all prior accounting standards previously referred to as FASBs,
SFASs, EITFs, APBs, FSPs, etc. All public companies are required to refer to
appropriate FASB ASC sections instead of the original accounting standards
formerly disclosed starting with the first fiscal quarter ending after September
15, 2009; this quarter for us. We are providing references to the original
accounting standards to ease the transition. The FASB ASC did not change GAAP.

     We prepared the accompanying unaudited Consolidated Financial Statements
according to the Securities and Exchange Commission's rules and regulations.
These rules and regulations permit condensing or omitting certain information
and note disclosures normally included in financial statements prepared
according to accounting principles generally accepted in the United States of
America (GAAP). The July 31, 2009 Consolidated Balance Sheet was derived from
audited financial statements but does not include all disclosures required by
GAAP. However, we believe the disclosures are sufficient to make the information
presented not misleading. These Consolidated Financial Statements and
accompanying notes should be read with the Consolidated Financial Statements and
accompanying notes included in our Annual Report on Form 10-K for the fiscal
year ended July 31, 2009.

     In our opinion, the Consolidated Financial Statements include all
adjustments (consisting of only normal recurring items) necessary to present
fairly our financial position and results of operations for the periods
presented. The results of operations for the three months ended October 31, 2009
may not be indicative of full year results.

     Certain amounts presented in the consolidated financial statements for the
prior period have been restated for the retrospective application of FASB ASC
470-20 (formerly referred to as Staff Position APB 14-1), "Accounting for
Convertible Debt Instruments That May Be Settled in Cash upon Conversion
(Including Partial Cash Settlements)." Interest expense is $900 higher and
income tax expense is $300 lower than originally reported for the three months
ended October 31, 2008 resulting in net income being $600 lower and diluted and
basic earnings per share $0.03 lower than originally reported. Additional
paid-in capital is $11,000 higher and retained earnings is $11,000 lower than
originally reported at July

                                       5
<PAGE>

31, 2009. Basic earnings per share is another $0.02 lower than originally
reported for the three months ended October 31, 2008 because of the
retrospective application of FASB ASC 260-10 (formerly referred to as Staff
Position EITF 03-6-1), "Determining Whether Instruments Granted in Share-Based
Payment Transactions Are Participating Securities."

Use of Estimates

     GAAP requires us to make significant estimates and assumptions to record
the amounts reported in the Consolidated Financial Statements and accompanying
notes for the allowance for credit losses, non-performing assets, residual
values, income taxes and stock-based compensation. Actual results could differ
from these estimates significantly.

New Accounting Standards

     FASB ASC 260-10 became effective for us on August 1, 2009 and is applied
retrospectively for all periods presented. It classifies unvested shares of
restricted stock and stock units with nonforfeitable dividend rights as
participating securities (securities participating in dividends with common
stock according to a formula). Participating securities require the "two-class"
method to calculate basic earnings per share. This method lowers basic earnings
per common share but does not affect diluted earnings per share or net income.
Basic earnings per share is net income available to common stockholders divided
by the weighted-average number of common shares outstanding during the period.
Net income available to common stockholders is net income less dividends paid on
and net income allocated to participating securities. Applying this FSP reduced
basic earnings per common share by $0.02 for the three months ended October 31,
2009.

     FASB ASC 470-20 became effective for us on August 1, 2009 and is applied
retrospectively for all periods presented. It requires a portion of convertible
debt that can be settled in cash to be recorded as equity and interest expense
to be recorded on the debt portion at a rate that would have been charged on
non-convertible debt with the same terms. It applies retrospectively through
April 30, 2009 to the $175,000 of 2.0% convertible debentures we repaid in April
2009 but will not affect current and future consolidated financial statements
because we repaid the debentures.

     We determined we would have been charged 4.2% on five-year non-convertible
term debt when we issued the convertible debentures in April 2004. As a result,
we reclassified $6,200 of the convertible debentures net of $2,200 of deferred
income taxes as equity as of August 1, 2007 (the beginning of the earliest
fiscal period to be presented after the FASB ASC 470-20 took effect). The $6,200
was amortized as a debt discount and recorded as additional interest expense
over the period August 1, 2007 to April 14, 2009 (the last day interest was due
on the debentures) using the interest method. Therefore, net income for fiscal
2009 and 2008 presented in all current and future consolidated financial
statements will be lower than originally reported. The effective interest rate
on the debt portion was 4.70% (includes amortization of deferred debt issuance
costs), and interest expense for the three months ended October 31, 2008
included $900 of amortization of the debt discount and $880 of contractual
interest. The unamortized debt discount was $1,700 at October 31, 2008.

     The FASB issued ASC 860, "Accounting for Transfers of Financial Assets",
(formerly referred to as SFAS No. 166) and ASC 810-10, "Amendments to FASB
Interpretation No. (46R)", (formerly referred to as SFAS No. 167) in June 2009.
ASC 860 requires additional disclosures for securitization transactions and
changes how special purpose entities are consolidated. ASC 810-10 changes how
companies determine how to consolidate variable interest entities. These ASCs
take effect for fiscal years beginning after November 15, 2009 and will take
effect for us on August 1, 2010 (fiscal 2011). They should not have a material
impact on our consolidated financial statements because we already consolidate
our two special purpose entities and we did not have any interests in variable
interest entities at October 31, 2009.


NOTE 2 - FINANCE RECEIVABLES

     Finance receivables comprise installment sale agreements and secured loans
(including line of credit arrangements), collectively referred to as loans, with
fixed or floating interest rates, and direct financing leases as follows:

     ===========================================================================
                                              October 31, 2009     July 31, 2009
     ===========================================================================
     Loans:
        Fixed rate                                  $1,202,503        $1,283,561
        Floating rate (indexed to the
          prime rate)                                   86,785           122,234
     ---------------------------------------------------------------------------
            Total loans                              1,289,288         1,405,795
     Direct financing leases *                         121,676           130,603
     ---------------------------------------------------------------------------
                Finance receivables                 $1,410,964        $1,536,398
     ===========================================================================
     * includes residual values of $28,100 at October 31, 2009 and $31,500 at
       July 31, 2009

                                       6
<PAGE>

     Line of credit arrangements contain off-balance sheet risk and are subject
to the same credit policies and procedures as other finance receivables. The
unused amount of these commitments was $12,700 at October 31, 2009 and $14,200
at July 31, 2009.

     Allowance for credit losses activity is summarized below:

     ==========================================================================
     Three Months Ended October 31,                      2009              2008
     ==========================================================================
     Allowance - beginning of period                  $25,007           $24,769
        Provision                                       2,500             1,400
        Write-downs                                    (2,944)           (2,122)
        Recoveries                                        465               742
     --------------------------------------------------------------------------
     Allowance - end of period                        $25,028           $24,789
     ==========================================================================
     Allowance - end of year as a percentage
        of finance receivables                           1.77%             1.31%
     ==========================================================================
     Net charge-offs *                                $ 2,479           $ 1,380
     ==========================================================================
     Loss ratio **                                       0.67%             0.29%
     ==========================================================================
     *  write-downs less recoveries
     ** net charge-offs over average finance receivables, annualized

     Non-performing assets comprise impaired finance receivables and assets
received to satisfy finance receivables as follows:

     ===========================================================================
                                               October 31, 2009    July 31, 2009
     ===========================================================================
     Impaired finance receivables                       $51,932          $64,507
     Assets received to satisfy finance
        receivables                                      30,256           22,536
     ---------------------------------------------------------------------------
            Non-performing assets                       $82,188          $87,043
     ===========================================================================

     The allowance for credit losses included $900 at October 31, 2009 and
$1,100 at July 31, 2009 specifically allocated to $5,200 and $11,900,
respectively, of impaired finance receivables. We did not recognize any income
in the three months ended October 31, 2009 or 2008 on impaired receivables
before collecting our net investment. We repossessed assets to satisfy $49,700
and $15,600 of finance receivables in the three months ended October 31, 2009
and 2008, respectively. We recorded $11,200 of impaired finance receivables
based on the fair value of the collateral and $17,900 of assets received to
satisfy receivables at fair value at October 31, 2009.


NOTE 3 - DEBT

     Debt is summarized below:

     ===========================================================================
                                               October 31, 2009    July 31, 2009
     ===========================================================================
     Fixed rate term notes:
        4.31% - 4.60% due 2013                         $ 30,000       $   75,000
        4.96% - 5.00% due 2010 - 2011                    81,400          250,000
        5.45% - 5.57% due 2011 - 2014                   265,000          325,000
     ---------------------------------------------------------------------------
           Total fixed rate term notes                  376,400          650,000
     Asset securitization borrowings - term              88,000          101,000
     ---------------------------------------------------------------------------
               Total term debt                          464,400          751,000
     Bank borrowings                                    371,400          197,000
     Commercial paper                                    89,200          104,000
     ---------------------------------------------------------------------------
                 Total debt                            $925,000       $1,052,000
     ===========================================================================

Term Notes

     In August 2009, we prepaid $168,600 of the five-year 5.00% term notes
maturing in May and August 2010, and in September 2009, we prepaid $60,000 of
the five-year 5.45% term notes maturing in March 2011. There was no gain or loss
on these prepayments. In October 2009, we prepaid a $45,000 five-year 4.31% term
note maturing in February 2013

                                       7
<PAGE>

for $41,400,and we prepaid a $15,000 million borrowing under a bank credit
facility expiring in February 2013 for $13,800 and terminated the $15,000 bank
credit facility. The prepayments resulted in a $2,400 debt retirement gain net
of reclassifying an unrealized interest rate lock loss from accumulated other
comprehensive income related to the $45,000 term note.

Asset Securitization Borrowings

     We have two asset securitization facilities totaling $425,000 expiring as
follows: $100,000 in April 2010 and $325,000 in June 2010. The facilities
provide for committed revolving financing during their one-year term and we can
convert borrowings outstanding into amortizing term debt if they are not
renewed. These facilities would terminate if net charge-offs of securitized
receivables or if delinquent receivables exceed certain levels and any
borrowings outstanding would convert into amortizing term debt. We would be
required to repay the amortizing term debt monthly from collections of
securitized receivables and it would be repaid substantially within two years.
The entire amount of the facilities was unused and available for us to borrow at
October 31, 2009.

     We are repaying the $88,000 of term asset securitization borrowings monthly
from collections of securitized receivables. The monthly repayment amounts vary
based on the amount of securitized receivables collected and the amount borrowed
under the $325,000 facility, and would increase if we borrow under this facility
or convert this facility into amortizing term debt upon nonrenewal. This term
debt will be repaid substantially within two years based on the amount of
securitized receivables at October 31, 2009 and no future borrowings under the
facility.

     Finance receivables included $130,000 of securitized receivables at October
31, 2009 and $167,000 at July 31, 2009. The amount of receivables we can
securitize is limited to 50% of our major operating subsidiary's receivables
because of restrictions in its other debt agreements. This limit was $700,000 at
October 31, 2009. Borrowings under these facilities and the amortizing term debt
are limited to 90% of securitized receivables classified as eligible.
Securitized receivables classified as impaired or with terms outside of defined
limits are not eligible.

Bank Borrowings

     We have $440,000 of committed unsecured revolving credit facilities from
nine banks with $125,000 expiring within one year and $315,000 expiring between
November 2009 ($15,000) and April 2012, and $68,600 of these facilities was
unused and available for us to borrow at October 31, 2009. Borrowings under
these facilities can mature between 1 and 270 days with interest rates based on
LIBOR or domestic money market rates. Borrowings outstanding at October 31, 2009
matured in November 2009, were reborrowed and remain outstanding. We incur a fee
on the unused portion of the facilities.

     In November 2009, we amended and combined two $50,000 facilities set to
expire in February 2010 and 2012 into a new $100,000 facility expiring in
November 2012.

Other

     We obtained all of our debt and credit facilities through our major
operating subsidiary. The subsidiary's debt agreements have restrictive
covenants limiting its indebtedness, encumbrances, investments, sales of assets,
mergers and other business combinations, capital expenditures, interest
coverage, net worth and dividends and other distributions to FFC. The subsidiary
complied with all debt covenants and restrictions at October 31, 2009. None of
the agreements or facilities has a material adverse change clause and all of our
debt is senior.

     Long-term debt comprised the following:

     ===========================================================================
                                               October 31, 2009    July 31, 2009
     ===========================================================================
     Term notes                                        $295,000         $425,000
     Borrowings under bank credit facilities
        expiring after one year                         315,000          197,000
     Commercial paper supported by long-term
        asset securitization facilities                  89,200          104,000
     Asset securitization borrowings - term              40,000           43,000
     Term notes refinanced in August 2009
        with borrowings under bank credit
        facilities expiring after one year                   --          163,000
     ---------------------------------------------------------------------------
                 Total long-term debt                  $739,200         $932,000
     ===========================================================================


                                       8
<PAGE>

NOTE 4 - STOCKHOLDERS' EQUITY

     We established a common stock and convertible debt repurchase program in
fiscal 2007 for an initial amount of $50,000. We increased the program by
$58,533 in fiscal 2009 and $43,862 remained authorized for future repurchases at
October 31, 2009. The program does not have an expiration date.

     The amount of equity we can distribute to stockholders is limited,
indirectly, because the amount of funds we can obtain from our major operating
subsidiary is restricted by its debt agreements. As a result, the amount of
stockholders' equity we could distribute at October 31, 2009 was limited to
$147,000. The limit increases each quarter by a percentage of the subsidiary's
net income.

     We reclassified $1,400 (net of $850 of deferred income tax) of the $2,004
unrealized net after-tax loss from interest rate locks in accumulated other
comprehensive loss at July 31, 2009 into net income in the three months ended
October 31, 2009 because we prepaid the related hedged debt.


NOTE 5 - STOCK PLANS

     We have two stockholder approved stock plans; the 2006 Stock Incentive Plan
(the "2006 Plan") and the Amended and Restated 2001 Management Incentive Plan
(the "Amended MIP"). The 2006 Plan authorizes the issuance of 2,500,000 shares
of restricted stock, non-qualified or incentive stock options, stock
appreciation rights, stock units and common stock to officers, other employees
and directors with annual participant limits, and expires in December 2016.
Awards may be performance-based. The exercise price of stock options cannot be
less than the fair market value of our common stock when granted and their term
is limited to ten years. There were 1,439,000 shares available for future grants
under the 2006 Plan at October 31, 2009. The Amended MIP authorizes the issuance
of 1,000,000 shares of restricted stock, with an annual participant limit of
200,000 shares, and awards of performance-based cash or stock bonuses to our CEO
and other selected officers. The Amended MIP expires in December 2011. There
were 565,000 shares available for future grants under the Amended MIP at October
31, 2009.

     We have a Supplemental Retirement Benefit ("SERP") for our CEO. We awarded
150,000 stock units to our CEO in fiscal 2002 vesting annually in equal amounts
over eight years. Subject to forfeiture, our CEO will receive shares of common
stock equal to the number of stock units vested when our CEO retires, and
131,000 units were vested at October 31, 2009.

     Shares of restricted stock, stock options and stock units are the only
incentive compensation we provide (other than a cash bonus for the CEO) and we
believe these stock-based awards further align employees' and directors'
interests with those of our stockholders. We do not have a policy to repurchase
shares in the open market, and we issue new shares when we award shares of
restricted stock or when options are exercised.

     Restricted stock activity for the three months ended October 31, 2009 is
summarized below (shares in thousands):

     ===========================================================================
                                                                Weighted-Average
                                          Shares           Grant-Date Fair Value
     ===========================================================================
     Unvested - August 1, 2009             1,189                          $25.59
        Granted                              300                           23.37
        Vested                               (10)                          26.06
        Forfeited                             --                              --
     -------------------------------------------
     Unvested - October 31, 2009           1,479                           25.14
     ===========================================================================

     Information on shares of restricted stock that vested follows (in
thousands, except intrinsic value per share):

     ==========================================================================
     Three Months Ended October 31,                      2009              2008
     ==========================================================================
     Number of shares vested                               10                10
     Total intrinsic value *                           $  244            $  234
     Intrinsic value per share                          24.40             23.40
     Tax shortfall realized                                --                 6
     ==========================================================================
     * shares vested multiplied by the closing prices of our common stock on the
       dates vested

                                       9
<PAGE>

     In October 2009, we awarded 70,000 shares of performance-based restricted
stock to executive officers under the 2006 Plan and 60,000 shares of
performance-based restricted stock to the CEO under the Amended MIP vesting in
October 2014. These shares would be forfeited if the performance condition,
based on diluted earnings per share for fiscal 2010, is not met. We also awarded
170,000 shares of restricted stock not performance-based to executive officers
including the CEO under the 2006 Plan in September 2009 vesting 20% after one,
two, three, four and five years.

     Shares of restricted stock unvested at October 31, 2009 and awarded before
July 31, 2009 vest as follows:

     o    370,000 shares awarded to executive officers and other employees in
          fiscal 2002 through fiscal 2009 vest annually in equal amounts over
          initial periods of three to eight years (seven year average)

     o    435,000 shares awarded in fiscal 2006 (and 55,000 restricted stock
          units awarded in fiscal 2009) to executive officers vest when the
          officer's service terminates, other than upon a non-qualifying
          termination, after six months (i) after the executive officer attains
          age 62 or (ii) after August 2026 if earlier (twelve year average) and
          a portion based on the percentage of the vesting period elapsed would
          vest upon a qualifying employment termination

     o    50,000 shares awarded to our CEO in fiscal 2009 vest in October 2013
          and 225,000 shares awarded to executive officers in fiscal 2008 vest
          in October 2012

     There were 272,000 stock units outstanding at October 31, 2009 and 188,000
were vested. All unvested shares of restricted stock and stock units are subject
to forfeiture and would vest immediately upon the sale of the Company or the
employee's or director's death or disability, and 828,000 of the shares of
restricted stock unvested at October 31, 2009 would also vest upon a qualifying
employment termination.

     We pay dividends on all unvested shares of restricted stock and make
dividend equivalent payments on all stock units. Dividends and dividend
equivalents paid are retained and not forfeited regardless of whether the shares
of restricted stock or stock units vest. The restricted stock and stock unit
agreements allow employees to pay income tax due by surrendering a portion of
the shares or units.

     Stock option activity and related information for the three months ended
October 31, 2009 are summarized below (options and intrinsic value in
thousands):

<TABLE>
<CAPTION>
     ==============================================================================
                                               Weighted-Average
                                            -------------------
                                                      Remaining  Options
                                            Exercise       Term   in the  Intrinsic
                                   Options     Price    (years)    Money    Value *
     ==============================================================================
<S>                                    <C>    <C>           <C>      <C>        <C>
     Outstanding - August 1, 2009      733    $24.35
        Exercised                      (68)    22.29
        Expired unexercised            (14)    25.12
        Forfeited                       --        --
     -------------------------------------
     Outstanding - October 31, 2009    651     24.55        1.4       27        $50
     ==============================================================================
     Exercisable - October 31, 2009    465    $24.45        0.9       12        $10
     ==============================================================================
</TABLE>
     * number of in-the-money options (options with an exercise price below the
       market price of our common stock) multiplied by the difference between
       their average exercise price and the $20.42 closing price of our common
       stock on October 31, 2009

     Information on stock option exercises follows (in thousands, except
intrinsic value per option):

     ===========================================================================
     Three Months Ended October 31,                        2009             2008
     ===========================================================================
     Number of options exercised                             68               20
     Total intrinsic value *                               $129              $49
     Intrinsic value per option                            1.90             2.45
     Tax shortfall realized                                  --                7
     ===========================================================================
     * options exercised multiplied by the difference between their exercise
       prices and the closing prices of our common stock on the exercise dates

                                       10
<PAGE>

     Future compensation expense (before deferral) for stock-based awards
unvested at October 31, 2009 and expected to vest, and the average expense
recognition periods follow:

     ===========================================================================
                                  Expense                 Weighted-Average Years
     ===========================================================================
     Restricted stock             $20,600                                    5.2
     Stock units                      600                                   10.0
     Stock options                    500                                    1.7
     ------------------------------------
                 Total            $21,700                                    5.2
     ===========================================================================

     Compensation recorded, deferred and in salaries and other expenses for
stock-based awards, and related tax benefits recorded, follow:

     ===========================================================================
     Three Months Ended October 31,                    2009                 2008
     ===========================================================================
     Total stock-based compensation                  $1,922               $2,004
     Deferred stock-based compensation                  808                  818
     ---------------------------------------------------------------------------
     Net stock-based compensation in
        salaries and other expenses                  $1,114               $1,186
     ===========================================================================
     Tax benefits                                    $  405               $  446
     ===========================================================================


NOTE 6 - EARNINGS PER COMMON SHARE

     Earnings per common share ("EPS") was calculated as follows (in thousands,
except per share amounts):

     ==========================================================================
     Three Months Ended October 31,                           2009         2008
     ==========================================================================
     Net income (used for diluted EPS)                     $10,302      $11,079
     Dividends paid on unvested shares of restricted
       stock and stock units                                  (180)        (176)
     Allocation of net income to holders of restricted
       stock and stock units                                  (336)        (371)
     --------------------------------------------------------------------------
          Net income available to common stockholders
            (used for basic EPS)                           $ 9,786      $10,532
     ==========================================================================
     Weighted-average common shares outstanding
       (used for basic EPS)                                 24,981       24,564
     Effect of dilutive securities:
       Shares of restricted stock and stock units              398          411
       Stock options                                            33           13
     --------------------------------------------------------------------------
          Adjusted weighted-average common shares
            outstanding (used for diluted EPS)              25,412       24,988
     ==========================================================================
     Net income per common share:
     ==========================================================================
         Diluted                                             $0.41        $0.44
     ==========================================================================
         Basic                                               $0.39        $0.43
     ==========================================================================
     Antidilutive shares of restricted stock,
        stock units and stock options *                        400          432
     ==========================================================================
     * excluded from the calculation because they would have increased diluted
       EPS

                                       11
<PAGE>

NOTE 7 - FAIR VALUES OF FINANCIAL INSTRUMENTS

     We estimate the fair value of our financial instruments; cash, finance
receivables (excluding leases), commitments to extend credit under line of
credit arrangements and debt, as described below.

     Carrying values of cash, commercial paper, bank borrowings and asset
securitization borrowings approximated their fair values based on their
short-term maturities and floating interest rates. Fair value of the term notes
payable was $371,400 at October 31, 2009 and $637,000 at July 31, 2009, compared
to their carrying amounts of $376,400 at October 31, 2009 and $650,000 at July
31, 2009. We calculated fair value based on the notes' cash flows discounted at
current market interest rates and credit spreads.

     It is not practicable for us to estimate the fair value of our finance
receivables and commitments to extend credit. These financial instruments were
not priced with any set formulas, were not credit-scored and are not
loan-graded. They are not traded on any market and we hold them to maturity.
Their average remaining life is less than two years, and full and partial
prepayment activity has been significant. They comprise a large number of
transactions with commercial customers in diverse businesses, are secured by
liens on various types of equipment and may be guaranteed by third parties and
cross-collateralized. Any difference between carrying value and fair value of
each transaction would be affected by a potential buyer's assessment of the
transaction's credit quality, collateral value, guarantees, payment history,
yield, term, documents and other legal matters, and other subjective
considerations. Value received in a fair market sale would be based on the terms
of the sale, our and the buyer's views of economic and industry conditions, tax
considerations and other factors.

                                       12
<PAGE>

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

Overview

     Financial Federal Corporation ("FFC") is an independent financial services
holding company operating in the United States primarily through one subsidiary.
We do not have any unconsolidated subsidiaries, partnerships or joint ventures.
We also do not have any off-balance sheet assets or liabilities (other than
commitments to extend credit), goodwill, other intangible assets or pension
obligations, and we are not involved in income tax shelters. We have two fully
consolidated special purpose entities for our on-balance-sheet asset
securitization facilities.

     We have one line of business. We lend money under installment sale
agreements, secured loans and leases (collectively referred to as "finance
receivables") to small and medium sized businesses for their equipment financing
needs. Finance receivable transactions generally range between $50,000 and $1.5
million, have terms between two and five years and require monthly payments. The
average transaction size is approximately $250,000. We earn revenue solely from
interest and other fees and amounts earned on our finance receivables. We need
to borrow most of the money we lend. Therefore, liquidity (money currently
available for us to borrow) is very important. We borrow from banks and
insurance companies and we issue commercial paper to other investors.
Approximately 65% of our finance receivables were funded with debt at October
31, 2009.

     Our main areas of focus are (i) asset quality (ii) liquidity (iii) net
interest spread (the difference between the rates we earn on our receivables and
the rates we incur on our debt) and (iv) interest rate risk. Changes in the
asset quality of our finance receivables can affect our profitability
significantly. Classifying receivables as impaired, incurring write-downs and
incurring costs associated with non-performing assets can have an adverse affect
on our finance income, provisions for credit losses and operating expenses.
Changes in market interest rates can also affect our profitability significantly
because the interest rates on our finance receivables were 94% fixed and 6%
floating, and the interest rates on our debt were 41% fixed and 59% floating at
October 31, 2009. We use various strategies to manage our credit risk and
interest rate risk. These four areas are integral to our long-term profitability
and we discuss them in detail in separate sections of this discussion.

     Our key operating statistics are net charge-offs, loss ratio,
non-performing assets, delinquencies, leverage, available liquidity, receivables
growth, return-on-equity, net interest margin and net interest spread, and
expense and efficiency ratios.

     On November 22, 2009, we entered into an Agreement and Plan of Merger with
People's United Financial, Inc. ("People's"), the holding company for People's
United Bank, to be acquired by People's. The merger must be approved by our
stockholders and is subject to other customary closing conditions. The merger is
expected to close in the third quarter of fiscal 2010 and our stockholders will
receive $11.27 in cash and one share of People's common stock for each share of
our common stock under the terms of the merger agreement.

Significant events

     We prepaid $288.6 million of debt in the first quarter of fiscal 2010;
$273.6 million of term notes and a $15.0 million borrowing under a bank credit
facility. We decided to prepay this amount of debt because (i) we had excess
liquidity (over $400.0 million remained after the prepayments) (ii) the interest
rates were significantly higher than the rates on our other funding sources
(iii) $228.6 million of the debt had short maturities of nine, twelve and
eighteen months and (iv) we recognized a $4.8 million gain on $60.0 million of
the debt. Based on our available liquidity, our outlook for the economy and
construction and transportation industries, the level of receivables
originations we expect for fiscal 2010, and the small amount of credit
facilities expiring in fiscal 2010, we determined we did not need this debt. The
average interest rate on the borrowings under our committed bank credit
facilities used to finance the prepayments was below 1.00% and the average rate
on the prepaid term notes was 5.20%. Therefore, prepaying this debt will result
in substantial interest savings. Information on the debt we prepaid follows.

     In July 2009, we offered to prepay, for their principal amount, the $250.0
million of five-year 5.00% term notes maturing in May and August 2010. Holders
of $168.6 million of the notes accepted the offer and were repaid in August
2009. In September 2009, we offered to prepay, for their principal amount, $60.0
million of the $160.0 million of five-year 5.45% term notes maturing in March
2011. Holders of $60.0 million of the notes accepted the offer and were repaid
in September 2009. There was no gain or loss on these prepayments. The note
holders accepted our offers to prepay these notes at principal even though they
would have received a prepayment premium if we chose to prepay the notes without
their consent.

                                       13
<PAGE>

     In October 2009, we prepaid a $45.0 million five-year 4.31% term note
maturing in February 2013 for $41.4 million and we prepaid $15.0 million of
borrowings under a bank credit facility expiring in February 2013 for $13.8
million and terminated the $15.0 million facility. This resulted in a $2.4
million debt retirement gain net of reclassifying an unrealized interest rate
lock loss from accumulated other comprehensive income related to the term note.
We were recording interest expense on the term note including the effect of the
interest rate lock loss at 5.90%. We financed the prepayments with borrowings
under our committed bank credit facilities. We do not plan to prepay any more
debt.

Critical Accounting Policies and Estimates

     Applying accounting principles generally accepted in the United States
requires judgment, assumptions and estimates to record the amounts in the
Consolidated Financial Statements and accompanying notes. We describe the
significant accounting policies and methods we use to prepare the Consolidated
Financial Statements in Note 1 to the Consolidated Financial Statements in our
Annual Report on Form 10-K for the fiscal year ended July 31, 2009. Accounting
policies involving significant judgment, assumptions and estimates are
considered critical accounting policies and are discussed below.

Allowance for Credit Losses

     The allowance for credit losses on finance receivables is our estimate of
losses inherent in our finance receivables at the balance sheet date. The
allowance is difficult to determine and requires significant judgment. The
allowance is based on total receivables, net charge-off experience, impaired and
delinquent receivables and our current assessment of the risks inherent in our
receivables from national and regional economic conditions, industry conditions,
concentrations, the financial condition of customers and guarantors, collateral
values and other factors. We may need to change the allowance level
significantly if unexpected changes in these conditions or factors occur.
Increases in the allowance would reduce net income through higher provisions for
credit losses. We would need to record a $1.4 million provision for each 0.10%
required increase in the allowance level. The allowance was $25.0 million (1.77%
of finance receivables) at October 31, 2009 including $0.9 million specifically
allocated to impaired receivables.

     The allowance includes amounts specifically allocated to impaired
receivables and an amount to provide for losses inherent in finance receivables
not impaired (the "general allowance"). We evaluate the fair values of impaired
receivables and compare them to the carrying amounts. The carrying amount is the
amount receivables are recorded at when we evaluate them and may include prior
write-downs or a specific allowance. If our fair value estimate is lower than
the carrying amount, we record a write-down or establish a specific allowance
depending on (i) how we determined fair value (ii) how certain we are of our
fair value estimate and (iii) the level and type of factors and items other than
the primary collateral supporting our fair value estimate, such as guarantees
and secondary collateral. We do not have a fixed formula or a pre-determined
period of past due status to record write-downs or specific reserves, we do not
write-off our entire net investment because our receivables are secured by
collateral that retains value and we do not lend to consumers.

     To estimate the general allowance, we analyze historical write-down
activity to develop percentage loss ranges by risk profile. Risk profiles are
assigned to receivables based on past due status and the customers' industry. We
do not use a loan grading system. We then adjust the calculated range of losses
for expected recoveries and differences between current and historical loss
trends and other factors to arrive at the estimated allowance. We record a
provision for credit losses if the recorded allowance differs from our current
estimate. The adjusted calculated range of losses may differ from actual losses
significantly because we use significant estimates.

Non-Performing Assets

     We record impaired finance receivables and repossessed equipment (assets
received to satisfy receivables) at the lower of their current estimated fair
value or their carrying amount. We estimate fair value of these non-performing
assets by evaluating the market value and condition of the collateral or assets
and the expected cash flows of impaired receivables. We evaluate market value
based on recent sales of similar equipment, used equipment publications, our
market knowledge and information from equipment vendors. Unexpected adverse
changes in or incorrect estimates of expected cash flows, market value or the
condition of collateral or assets, or time needed to sell equipment would
require us to record a write-down. This would lower net income. Non-performing
assets were $82.2 million (5.8% of finance receivables) at October 31, 2009.

Residual Values

     We record residual values on direct financing leases at the lowest of (i)
any stated purchase option (ii) the present value at the end of the initial
lease term of rentals due under any renewal options or (iii) our projection of
the equipment's fair value at the end of the lease. We may not realize the full
amount of recorded residual values because of unexpected adverse changes

                                       14
<PAGE>

in or incorrect projections of future equipment values. This would lower net
income. Residual values were $28.1 million (2.0% of finance receivables) at
October 31, 2009. Historically, we have realized recorded residual values on
disposition.

Income Taxes

     We record a liability for uncertain income tax positions by (i) identifying
the uncertain tax positions we take on our income tax returns (ii) determining
if these positions would more likely than not be allowed by a taxing authority
and (iii) estimating the amount of tax benefit to record if these tax positions
pass the more-likely-than-not test. Therefore, we record a liability for tax
benefits from positions failing the test and from positions we do not expect to
realize the full amount of the tax benefits. Identifying uncertain tax
positions, determining if they pass the test and determining the liability to
record requires significant judgment because tax laws are complicated and
subject to interpretation, and because we have to assess the likely outcome of
hypothetical challenges to these positions by taxing authorities. Actual
outcomes of challenges to these uncertain tax positions differing from our
assessments significantly and taxing authorities examining positions we did not
consider uncertain could require us to record additional income tax expense
including interest and penalties. This would lower net income. The gross
liability recorded for uncertain tax positions was $1.3 million at July 31, 2009
and we do not expect this amount to change significantly in fiscal 2010.

Stock-Based Compensation

     We record compensation expense only for stock-based awards expected to
vest. Therefore, we must estimate expected forfeitures of stock awards. This
requires significant judgment and an analysis of historical data. We would need
to record more compensation expense for stock awards if expected forfeitures
exceed actual forfeitures. Our average expected annual rate of forfeitures on
all stock awards was 2.3% at October 31, 2009 resulting in 0.2 million stock
awards expected to be forfeited.


Results of Operations

     Two changes to GAAP requiring retrospective treatment became effective for
us in the first quarter of fiscal 2010. This means prior year amounts affected
by the new accounting standards and presented in this 10-Q and future 10-Qs and
10-Ks will be different than reported originally. These changes are not
corrections of errors. We discuss the new accounting standards in Note 1
(Summary of Significant Accounting Policies) to the consolidated financial
statements. One standard requires us to increase the amount of interest expense
we originally reported and the other requires us to change how we calculate
basic earnings per share. Increasing interest expense in prior periods affects
comparisons with many current period amounts. The following table shows the
original and restated amounts for the first quarter of fiscal 2009 compared to
the corresponding amounts for the first quarter of fiscal 2010.

     ==========================================================================
     Three Months Ended October 31,               2009                     2008
                                                           --------------------
                                                           Restated    Original
     ==========================================================================
     Interest expense                            $ 8.7        $16.3       $15.4
     Net finance income before provision for
        credit losses on finance receivables      24.5         26.7        27.6
     Net finance income                           22.0         25.3        26.2
     Income before provision for income taxes     16.7         18.1        19.0
     Provision for income taxes                    6.4          7.0         7.3
     Net income                                   10.3         11.1        11.7
     Diluted earnings per share                   0.41         0.44        0.47
     Basic earnings per share *                   0.39         0.43        0.48

     Cost of debt                                 3.46%        4.52%       4.26%
     Net interest spread                          5.43         4.37        4.63
     Net interest margin                          6.56         5.52        5.71
     Efficiency ratio                             31.6         26.8        26.0
     Return-on-equity                              8.9         10.4        11.0
     ==========================================================================
     * the restated amount is $0.03 lower because of the increase in interest
       expense and is $0.02 lower because of the change in calculation

                                       15
<PAGE>

Comparison  of three months ended October 31, 2009 to three months ended October
31, 2008

      ========================================================================
                                      Three Months Ended
                                             October 31,
      ($ in millions, except          ------------------
      per share amounts)                  2009      2008   $ Change   % Change
      ========================================================================
     Finance income                      $33.2     $43.0     $ (9.8)       (23)%
     Interest expense                      8.7      16.3       (7.6)       (47)
        Net finance income before
          provision for credit losses     24.5      26.7       (2.2)        (8)
     Provision for credit losses           2.5       1.4        1.1         79
     Gain on debt retirement               2.4        --        2.4        100
     Salaries and other expenses           7.7       7.2        0.5          8
     Provision for income taxes            6.4       7.0       (0.6)       (10)
        Net income                        10.3      11.1       (0.8)        (8)

     Diluted earnings per share           0.41      0.44      (0.03)        (7)
     Basic earnings per share             0.39      0.43      (0.04)        (9)

     Return-on-equity                      8.9%     10.4%

     Excluding the debt retirement gain:
     -----------------------------------
        Net income                       $ 8.8     $11.1     $ (2.3)       (21)%

        Diluted earnings per share        0.35      0.44      (0.09)       (20)
        Basic earnings per share          0.33      0.43      (0.10)       (23)

        Return-on-equity                   7.6%     10.4%
     =========================================================================

     Net income decreased by 8% to $10.3 million in the first quarter of fiscal
2010 from $11.1 million in the first quarter of fiscal 2009. Net income without
the $1.5 million after-tax debt retirement gain decreased by 21% because the
effects of the 23% decrease in average receivables and higher non-performing
assets exceeded the effects of lower short-term market interest rates. Net
income without the after-tax debt retirement gain and the effect of the
additional interest expense recorded for the first quarter of fiscal 2009 from
the retrospective change in GAAP decreased by 25%.

     Finance income decreased by 23% to $33.2 million in the first quarter of
fiscal 2010 from $43.0 million in the first quarter of fiscal 2009 because
average finance receivables decreased 23% ($440.0 million) to $1.48 billion from
$1.92 billion. The yield on finance receivables was 8.89% in both quarters
because the effects of higher impaired receivables and the 145 basis point
(1.45%) decrease in the average prime rate were offset by higher rates on
originations. Changes in the prime rate affect the yield on receivables because
6% of our receivables are floating rate and indexed to prime.

     Interest expense (incurred on debt used to fund finance receivables)
decreased by 47% to $8.7 million in the first quarter of fiscal 2010 from $16.3
million in the first quarter of fiscal 2009 because our average debt decreased
31% ($440.0 million) and our cost of debt decreased to 3.46% from 4.52%. Lower
short-term market interest rates and repaying $473.6 million of fixed rate term
debt with an average rate of 5.00% since the end of the first quarter of fiscal
2009, partially offset by higher credit spreads, caused the decrease in our cost
of debt. Our cost of debt decreases when short-term market interest rates
decrease because the interest rates on over 50% of our debt are indexed to
short-term market interest rates. We discuss this in the Market Interest Rate
Risk and Sensitivity section.

     Net finance income before provision for credit losses on finance
receivables decreased by 8% to $24.5 million in the first quarter of fiscal 2010
from $26.7 million in the first quarter of fiscal 2009. Net interest margin (net
finance income before provision for credit losses expressed as an annualized
percentage of average finance receivables) increased to 6.56% from 5.52% because
of the decrease in our cost of debt.

     The provision for credit losses on finance receivables was $2.5 million in
the first quarter of fiscal 2010 and $1.4 million in the first quarter of fiscal
2009. Net charge-offs (write-downs of finance receivables less recoveries)
increased to $2.5 million in the first quarter of fiscal 2010 from $1.4 million
in the first quarter of fiscal 2009, and the loss ratio (net charge-offs
expressed as an annualized percentage of average finance receivables) increased
to 0.67% from 0.29%. Net charge-offs have been increasing because of higher
non-performing assets, the recession and declining collateral values. We discuss
the allowance and net charge-offs further in the Finance Receivables and Asset
Quality section.

                                       16
<PAGE>

     Salaries and other expenses increased by 8% to $7.7 million in the first
quarter of fiscal 2010 from $7.2 million in the first quarter of fiscal 2009
because of higher non-performing asset costs. The expense ratio (salaries and
other expenses expressed as an annualized percentage of average finance
receivables) worsened to 2.07% from 1.48% because expenses increased and
receivables decreased. The efficiency ratio (expense ratio expressed as a
percentage of net interest margin) worsened to 31.6% from 26.8% because expenses
increased and net finance income before provision for credit losses decreased.

     The provision for income taxes decreased by 10% to $6.4 million in the
first quarter of fiscal 2010 from $7.0 million in the first quarter of fiscal
2009 because of the decrease in net income before income taxes and, to a lesser
extent, the decrease in our effective tax rate to 38.1% in the first quarter of
fiscal 2010 from 38.8% in the first quarter of fiscal 2009. Our effective tax
rate decreased because of increased tax benefits (reductions of the provision
for income taxes) related to stock options and because of the slight decrease in
our state effective income tax rate.

     Diluted earnings per share decreased by 7% to $0.41 in the first quarter of
fiscal 2010 from $0.44 in the first quarter of fiscal 2009 and basic earnings
per share decreased by 9% to $0.39 from $0.43 because of the decrease in net
income. Diluted earnings per share without the after-tax debt retirement gain
decreased by 20% and with the effect of the additional interest expense in the
first quarter of fiscal 2009 from the retrospective change in GAAP also excluded
decreased by 26%.

     Net income, diluted and basic earnings per share and return-on-equity
excluding the $1.5 million after-tax debt retirement gain are non-GAAP financial
measures. We believe presenting these financial measures is useful to investors
because they provide consistency and comparability with our operating results
for the prior period and a better understanding of the changes and trends in our
operating results.

Finance Receivables and Asset Quality

     We discuss trends and characteristics of our finance receivables and our
approach to managing credit risk in this section. The key aspect is asset
quality. Asset quality statistics measure our underwriting standards, skills and
policies and procedures and can indicate the direction of future net charge-offs
and non-performing assets.

     ==========================================================================
                                     October 31,   July 31,
     ($ in millions)                      2009 *     2009 *  $ Change  % Change
     ==========================================================================
     Finance receivables                $1,411.0   $1,536.4   $(125.4)      (8)%
     Allowance for credit losses            25.0       25.0        --       --
     Non-performing assets                  82.2       87.0      (4.8)      (6)
     Delinquent finance receivables         28.6       38.0      (9.4)     (25)
     Net charge-offs                         2.5        2.3       0.2        8

     As a percentage of receivables:
     -------------------------------
     Allowance for credit losses            1.77%      1.63%
     Non-performing assets                  5.82       5.67
     Delinquent finance receivables         2.03       2.47
     Net charge-offs (loss ratio)           0.67       0.57
     ==========================================================================
     *  as of and for the quarter ended

     Finance receivables comprise installment sale agreements and secured loans
(collectively referred to as loans) and direct financing leases. Loans were 91%
($1.29 billion) of finance receivables and leases were 9% ($122 million) at
October 31, 2009. Finance receivables decreased $125.4 million or 8% in the
first quarter of fiscal 2010 because of lower originations.

     We originated $64.1 million of finance receivables in the first quarter of
fiscal 2010 compared to $225.0 million in the first quarter of fiscal 2009.
Originations decreased because the recession has reduced demand for equipment
financing significantly and because we are approving transactions selectively to
preserve asset quality. We collected $176.0 million of finance receivables and
repossessions in the first quarter of fiscal 2010 compared to $273.0 million in
the first quarter of fiscal 2009. Collections decreased because of lower
receivables, fewer prepayments and the increase in delinquent receivables.

     Our primary focus is the credit quality of our receivables. We manage our
credit risk by adhering to disciplined and sound underwriting policies and
procedures, by monitoring our receivables closely, by handling non-performing
accounts effectively and by managing the size of our receivables portfolio. Our
underwriting policies and procedures require a first lien on equipment financed.
We focus on financing equipment with a remaining useful life longer than the
term financed,

                                       17
<PAGE>

historically low levels of technological obsolescence, use in more than one type
of business, ease of access and transporting, and broad, established resale
markets. Securing our receivables with equipment possessing these
characteristics can mitigate potential net charge-offs. We may also obtain
additional equipment or other collateral, third-party guarantees, advance
payments or hold back a portion of the amount financed. We do not finance or
lease aircraft or railcars, computer related equipment, telecommunications
equipment or equipment located outside the United States, and we do not lend to
consumers.

     Our underwriting policies also limit our credit exposure with any customer.
The limit was $40.0 million at October 31, 2009. Our ten largest customers
accounted for 9.6% ($136.0 million) of total finance receivables at October 31,
2009 compared to 8.0% ($125.0 million) at July 31, 2009.

     Our allowance for credit losses was $25.0 million at October 31, 2009
compared to $25.0 million at July 31, 2009, and the allowance level increased to
1.77% of finance receivables from 1.63%. The allowance is our estimate of losses
inherent in our finance receivables. We determine the allowance quarterly based
on our analysis of historical losses and the past due status of receivables
adjusted for expected recoveries and any differences between current and
historical loss trends and other factors. Our estimates of inherent losses
increased in the first quarter of fiscal 2010 because of higher net charge-offs
and continued high levels of non-performing assets.

     Net charge-offs of finance receivables (write-downs less recoveries) were
$2.5 million in the first quarter of fiscal 2010 compared to $2.3 million in the
fourth quarter of fiscal 2009 and the loss ratios were 0.67% and 0.57%. Net
charge-offs have been increasing because the recession is impacting our
customers' cash flows and collateral values adversely.

     The net investments in impaired finance receivables, repossessed equipment
(assets received to satisfy receivables), total non-performing assets and
delinquent finance receivables (transactions with more than a nominal portion of
a contractual payment 60 or more days past due) follow ($ in millions):

     ==========================================================================
                                            October 31,   July 31,  October 31,
                                                   2009       2009         2008
     ==========================================================================
     Impaired finance receivables *               $51.9      $64.5        $30.7
     Repossessed equipment                         30.3       22.5         15.2
     --------------------------------------------------------------------------
          Total non-performing assets             $82.2      $87.0        $45.9
     ==========================================================================
     Delinquent finance receivables               $28.6      $38.0        $22.4
     ==========================================================================
     Impaired finance receivables not delinquent     73%        60%          47%
     ==========================================================================
     * before specifically allocated allowance of $0.9 million at October 31,
       2009, $1.1 million at July 31, 2009 and $0.9 million at October 31, 2008

     We expect net charge-offs, impaired and delinquent receivables and
repossessed equipment to trend higher because of the recession's continuing
impact on our customers. This could require us to record higher provisions for
credit losses.

Liquidity and Capital Resources

     We describe our need for raising capital (debt and equity), our need to
maintain a substantial amount of liquidity (money currently available for us to
borrow), how we manage liquidity and our funding sources in this section. Key
indicators are leverage (the number of times debt exceeds equity), available
liquidity, credit ratings and debt maturities. Our leverage is low for a finance
company, we have ample liquidity available, we have been successful issuing debt
and our debt is diversified with maturities staggered over four years. We are
not dependent on any of our funding sources or providers.

     Liquidity and access to capital are vital to our operations and growth. We
need continued availability of funds to originate or acquire finance receivables
and to repay debt. To ensure we have enough liquidity, we project our financing
needs based on estimated receivables growth and maturing debt, we monitor
capital markets closely, we diversify our funding sources and we stagger our
debt maturities.

     Funding sources usually available to us include operating cash flow,
private and public issuances of term debt, committed unsecured revolving bank
credit facilities, conduit and term securitizations of finance receivables,
secured term financings, dealer placed and direct issued commercial paper and
sales of common and preferred equity. The external funding sources may be
difficult or expensive to obtain because of credit market conditions. However,
we have $404.4 million

                                       18
<PAGE>

available to borrow under our committed revolving bank and asset securitization
facilities (after subtracting commercial paper outstanding) at October 31, 2009.
Therefore, we do not have a current need for additional financing.

     Our term notes are rated `BBB+' by Fitch Ratings, Inc. ("Fitch", a
Nationally Recognized Statistical Ratings Organization) and our commercial paper
is rated 'F2' by Fitch. Fitch affirmed these investment grade ratings in
November 2009 and raised its outlook to positive from stable because of the
pending merger with People's United. As a condition of our 'F2' credit rating,
commercial paper outstanding is limited to the unused amount of our committed
bank and securitization credit facilities. Our ability to obtain or renew
financing and our credit spreads can be dependent on these investment grade
credit ratings.

     We obtained all of our debt and credit facilities through our major
operating subsidiary. The subsidiary's debt agreements have restrictive
covenants limiting its indebtedness, encumbrances, investments, sales of assets,
mergers and other business combinations, capital expenditures, interest
coverage, net worth and dividends and other distributions to FFC. The subsidiary
has always complied with all debt covenants and restrictions. None of the
agreements or facilities has a material adverse change clause and all of our
debt is senior.

     Debt decreased by 12% ($127.0 million) to $925.0 million from $1.05 billion
during the first quarter of fiscal 2010 and stockholders' equity increased by 2%
($11.3 million) to $463.3 million from $452.0 million. Therefore, leverage
(debt-to-equity ratio) decreased to 2.0 at October 31, 2009 from 2.3 at July 31,
2009. Our leverage reached this low level because we have remained profitable
while contracting during the recent credit markets crisis and recession. This
level of leverage allows for substantial asset growth and equity distributions
and repurchases.

     Debt comprised the following ($ in millions):

     ==========================================================================
                                          October 31, 2009       July 31, 2009
                                          ----------------     ----------------
                                          Amount   Percent     Amount   Percent
     ==========================================================================
     Term notes                           $376.4        41%   $  650.0       62%
     Bank borrowings                       371.4        40       197.0       19
     Commercial paper                       89.2        10       104.0       10
     Asset securitization
         borrowings - term                  88.0         9       101.0        9
     --------------------------------------------------------------------------
                 Total debt               $925.0       100%   $1,052.0      100%
     ==========================================================================

Term Notes

     We issued the term notes between fiscal 2005 and 2008. They are five and
seven year fixed rate notes with principal due at maturity between May 2010 and
April 2014. Their average maturity was 2.2 years at October 31, 2009 and $81.4
million matures in the next twelve months. We prepaid $273.6 million of the term
notes in the first quarter of fiscal 2010. Interest is payable semiannually.

Bank Credit Facilities

     We have $440.0 million of committed unsecured revolving credit facilities
from nine banks with original terms between two and five years, and $68.6
million was unused and available for us to borrow at October 31, 2009. The
facilities range from $15.0 million to $110.0 million, have an average remaining
term of 1.7 years and expire between November 2009 ($15.0 million) and April
2012 with $75.0 million expiring in the next twelve months. Borrowings under the
facilities can mature between 1 and 270 days. We borrow amounts for one day, one
week or one month depending on interest rates, and roll the borrowings over when
they mature depending on our financing needs and whether we issue or repay other
debt. Borrowings outstanding at October 31, 2009 matured in November 2009, were
reborrowed and remain outstanding. We terminated a $15.0 million facility in the
first quarter of fiscal 2010 when we prepaid the borrowings outstanding.

     These committed facilities are a low-cost source of funds and support our
commercial paper program. We can borrow the full amount under each facility
immediately. None of the facilities are for commercial paper back-up only and
the facilities do not have usage fees. These facilities might be renewed,
extended or increased before they expire. In November 2009, we amended and
combined two $50.0 million facilities set to expire in February 2010 and 2012
into a new $100.0 million facility expiring in November 2012 with a higher
credit spread.

Asset Securitization Financings

     We have two asset securitization facilities totaling $425.0 million
expiring as follows: $100.0 million in April 2010 and $325.0 million in June
2010. The facilities provide for committed revolving financing during their
one-year term and we

                                       19
<PAGE>

can convert borrowings outstanding into amortizing term debt if they are not
renewed. These facilities would terminate if net charge-offs of securitized
receivables or if delinquent receivables exceed certain levels and any
borrowings outstanding would convert into amortizing term debt. We would be
required to repay the amortizing term debt monthly from collections of
securitized receivables and it would be repaid substantially within two years.
The entire amount of the facilities was unused and available for us to borrow at
October 31, 2009.

     We are repaying the $88.0 million of term asset securitization borrowings
monthly from collections of securitized receivables. The monthly repayment
amounts vary based on the amount of securitized receivables collected and the
amount borrowed under the $325.0 million facility, and would increase if we
borrow under this facility or convert this facility into amortizing term debt
upon nonrenewal. This term debt will be repaid substantially within two years
based on the amount of securitized receivables at October 31, 2009 and no future
borrowings under the facility.

     Finance receivables included $130.0 million of securitized receivables at
October 31, 2009 and $167.0 million at July 31, 2009. The amount of receivables
we can securitize is limited to 50% of our major operating subsidiary's
receivables because of restrictions in its other debt agreements. This limit was
$700.0 million at October 31, 2009. Borrowings under these facilities and the
amortizing term debt are limited to 90% of securitized receivables classified as
eligible. Securitized receivables classified as impaired or with terms outside
of defined limits are not eligible.

Commercial Paper

     We issue commercial paper direct and through a $500.0 million dealer
program with maturities between 1 and 270 days. The amount of commercial paper
we could issue is limited to the lower of $500.0 million and the unused amount
of our committed bank and asset securitization facilities ($493.6 million at
October 31, 2009).

Stockholders' Equity

     The amount of equity we can distribute to stockholders is limited,
indirectly, because the amount of funds we can obtain from our major operating
subsidiary is restricted by its debt agreements. As a result, the amount of
stockholders' equity we could distribute at October 31, 2009 was limited to
$147.0 million. The limit increases each quarter by a percentage of the
subsidiary's net income.

     We paid $3.9 million of cash dividends and we received $1.5 million from
stock option exercises in the first quarter of fiscal 2010. We have a common
stock repurchase program with $43.9 million authorized for future repurchases at
October 31, 2009. We established the program in fiscal 2007 and it does not have
an expiration date. Repurchases are discretionary.

Market Interest Rate Risk and Sensitivity

     We discuss how changes in market interest rates and credit spreads affect
our net interest spread and how we manage interest rate risk in this section.
Net interest spread (net yield of finance receivables less cost of debt) is an
integral part of a finance company's profitability and is calculated below:

     ==========================================================================
     Three Months Ended October 31,                   2009                 2008
     ==========================================================================
     Net yield of finance receivables                 8.89%                8.89%
     Cost of debt                                     3.46                 4.52
     --------------------------------------------------------------------------
                 Net interest spread                  5.43%                4.37%
     ==========================================================================

     Our net interest spread was 106 basis points (1.06%) higher in the first
quarter of fiscal 2010 compared to the first quarter of fiscal 2009 because
decreases in short-term market interest rates and repaying $473.6 million of
fixed rate term debt with an average rate of 5.00% since the end of the first
quarter of fiscal 2009 lowered our cost of debt. Short-term LIBOR averaged 200
basis points (2.00%) lower and 30-day LIBOR was near an all-time low of 0.24% at
October 31, 2009. Interest rates on our floating rate debt are indexed to
short-term LIBOR rates. As a result, our current cost of debt is very low and
should decrease a little further because the full effect of the term note
prepayments will start in the second quarter of fiscal 2010.

     Our net interest spread is sensitive to changes in short and long-term
market interest rates (includes LIBOR, rates on U.S. Treasury securities,
money-market rates, swap rates and the prime rate). Increases in short-term
rates reduce our net interest spread and decreases in short-term rates increase
it because our floating rate debt (includes short-term debt) exceeds

                                       20
<PAGE>

our floating rate finance receivables by a significant amount. Interest rates on
our debt change faster than the yield on our receivables because 59% of our debt
is floating rate compared to floating rate receivables of only 6%.

     Credit spreads (the percentage amounts lenders charge above a base market
interest rate) also affect our net interest spread. Changes in credit spreads
affect the yield on our receivables when originated and the cost of our debt
when issued. Credit spreads have increased significantly because of credit
markets conditions. As result, we have been charged much higher credit spreads
on renewed and new financing.

     Our net interest spread is also affected when the differences between
short-term and long-term rates change. Long-term rates normally exceed
short-term rates. When this excess narrows (resulting in a "flattening yield
curve") or when short-term rates exceed long-term rates (an "inverted yield
curve"), our net interest spread should decrease and when the yield curve widens
our net interest spread should increase because the rates we charge our
customers are largely determined by long-term market interest rates and rates on
our floating rate debt are largely determined by short-term market interest
rates. We can mitigate the effects of a flat or inverted yield curve by issuing
long-term fixed rate debt.

     Our income is subject to the risk of rising short-term market interest
rates and changes in the yield curve because floating rate debt exceeded
floating rate receivables by $461.8 million at October 31, 2009 as shown in the
table below. The terms and prepayment experience of fixed rate receivables
mitigate this risk. We collect receivables monthly over short periods of two to
five years. Fixed rate receivables have an average remaining life excluding
prepayments of approximately eighteen months at October 31, 2009 and scheduled
collections in the next twelve months are $530.0 million (40%). Historically,
annual collections have exceeded 50% of average receivables because of
prepayment activity. We do not match the maturities of our debt to our
receivables.

     Our current cost of debt is very low (and should decrease a little further
in the second quarter of fiscal 2010 when the full effect of the term note
prepayments will start) because short-term market interest rates are at historic
lows and a significant portion of our debt and credit facilities have low credit
spreads because they were obtained before the crisis in the credit markets
started. Therefore, our cost of debt will increase considerably when short-term
market interest rates rise and as we renew and obtain financing.

     We monitor our exposure to potential adverse changes in market interest
rates by comparing the fixed and floating rate percentages of our receivables
and debt and by determining the potential impact adverse changes in market
interest rates could have on our net income. We may hedge our exposure to this
interest rate risk by entering into derivatives on existing debt or debt we
expect to issue, and we may change the proportion of our fixed and floating rate
debt. We do not speculate with or trade derivatives. We had no derivatives
outstanding in the first quarter of fiscal 2010.

     We quantify interest rate risk by calculating the effect on net income of a
hypothetical, immediate 100 basis point (1.0%) rise in market interest rates.
This hypothetical change in rates would reduce annual net income by
approximately $0.4 million at October 31, 2009 based on the scheduled repricing
of floating rate debt, fixed rate debt maturing within one year, the expected
effects on the yield of new receivables. The reduction in annual net income
increases to $0.7 million if the effects on the yield of new receivables are
excluded. We believe these amounts are acceptable considering the cost of
floating rate debt is lower than fixed rate debt. Actual future changes in
market interest rates and their effect on net income may differ from these
amounts materially. Other factors that may accompany an actual immediate 100
basis point rise in market interest rates were not considered in the
calculation. These hypothetical reductions of net income were the same at
October 31, 2008.

     The fixed and floating rate amounts and percentages of our receivables and
capital at October 31, 2009 follow ($ in millions):

     ===========================================================================
                                     Fixed Rate        Floating Rate
                               ----------------     ----------------
                               Amount   Percent     Amount   Percent       Total
     ===========================================================================
     Finance receivables     $1,324.2       94%     $ 86.8        6%    $1,411.0
     ===========================================================================
     Debt                    $  376.4       41%     $548.6       59%    $  925.0
     Stockholders' equity       463.3       100         --       --        463.3
     ---------------------------------------------------------------------------
               Capital       $  839.7       60%     $548.6       40%    $1,388.3
     ===========================================================================

                                       21
<PAGE>

     The fixed and floating rate amounts and percentages of our receivables and
capital at July 31, 2009 follow ($ in millions):

     ===========================================================================
                                     Fixed Rate        Floating Rate
                               ----------------     ----------------
                               Amount   Percent     Amount   Percent       Total
     ===========================================================================
     Finance receivables     $1,414.2       92%     $122.2        8%    $1,536.4
     ===========================================================================
     Debt                       650.0       62%     $402.0       38%    $1,052.0
     Stockholders' equity       452.0       100         --        --       452.0
     ---------------------------------------------------------------------------
               Capital       $1,102.0       73%     $402.0       27%    $1,504.0
     ===========================================================================

     Floating rate debt comprises bank borrowings, commercial paper and term
asset securitization borrowings, and reprices (interest rates change based on
current short-term market interest rates) after October 31, 2009 as follows:
$529.4 million (97%) in one month and $19.2 million (3%) in two months. Floating
rate receivables only reprice when the prime rate changes. Repricing frequencies
of floating rate debt follow ($ in millions):

     ===========================================================================
                                   Balance         Repricing Frequency
     ===========================================================================
     Bank borrowings                $371.4         1 to 30 days
     Commercial paper                 89.2         1 to 45 days (20 day average)
     Asset securitization
        borrowings - term             88.0         1 to 30 days
     ===========================================================================


New Accounting Standards

     Refer to Note 1 (Summary of Significant Accounting Policies) to the
consolidated financial statements.


Forward-Looking Statements

     Statements in this report containing the words or phrases "expect,"
"anticipate," "may," "might," "believe," "appears," "plan," "intend,"
"estimate," "could," "should," "would," "will," "if," "outlook," "likely,"
"unlikely" and other words and phrases expressing our expectations are
"forward-looking statements." Actual results could differ from those contained
in the forward-looking statements materially because they involve various
assumptions and known and unknown risks and uncertainties. Information about
risk factors that could cause actual results to differ materially is discussed
in Part I, Item 1A Risk Factors in our Annual Report on Form 10-K for the year
ended July 31, 2009 and other sections of this report. Risk factors include (i)
an economic slowdown (ii) the inability to collect finance receivables and the
sufficiency of the allowance for credit losses (iii) the inability to obtain
capital or maintain liquidity (iv) rising short-term market interest rates,
higher credit spreads, and adverse changes in the yield curve (v) increased
competition (vi) the inability to retain key employees and (vii) adverse
conditions in the construction and road transportation industries.
Forward-looking statements do not guarantee our future performance and apply
only as of the date made. We are not required to update or revise them for
future or unanticipated events or circumstances.


Item 3.   Quantitative and Qualitative Disclosures About Market Risk

     See Item 2, Market Interest Rate Risk and Sensitivity.


Item 4.   Controls and Procedures

Evaluation of Disclosure Controls and Procedures

     Our management (with our Chief Executive Officer's and Chief Financial
Officer's participation) evaluated our disclosure controls and procedures (as
defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934)
at the end of the period covered by this report. Based on this evaluation, our
Chief Executive Officer and Chief Financial Officer concluded our disclosure
controls and procedures are effective to ensure information required to be
disclosed in reports we file or submit under the Securities Exchange Act of 1934
is recorded, processed, summarized and reported timely.

Changes in Internal Control Over Financial Reporting

     There were no changes in our internal control over financial reporting
during the first quarter of fiscal 2010 that affected or are reasonably likely
to affect our internal control over financial reporting materially.

                                       22
<PAGE>

PART II - OTHER INFORMATION


Item 5.   Other Information

     We issued a press release on December 8, 2009 reporting our results for the
quarter ended October 31, 2009. The press release is attached as Exhibit 99.1.
Exhibit 99.1 shall not be deemed "filed" for purposes of Section 18 of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), or subject to
the liabilities of that section, nor shall it be deemed incorporated by
reference in any filing under the Securities Act of 1933, as amended, or the
Exchange Act, except as shall be expressly set forth by specific reference.

     We issued a press release on December 8, 2009 announcing our Board of
Directors declared a quarterly dividend of $0.15 per share on our common stock.
The press release is attached as Exhibit 99.2. The dividend is payable on
January 14, 2010 to stockholders of record at the close of business on December
24, 2009. The dividend is the same as the previous quarter.


Item 6.   Exhibits

Exhibit No.   Description of Exhibit
-----------   ------------------------------------------------------------------
 3.1    (a)   Articles of Incorporation
 3.2    (b)   Certificate of Amendment of Articles of Incorporation dated
              December 9, 1998
 3.3    (c)   Amended and Restated By-laws dated March 5, 2007
31.1          Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer
31.2          Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer
32.1          Section 1350 Certification of Chief Executive Officer
32.2          Section 1350 Certification of Chief Financial Officer
99.1          Press release dated December 8, 2009
99.2          Press release dated December 8, 2009

Previously filed with the Securities and Exchange Commission as an exhibit to
our:
--------------------------------------------------------------------------------
(a)     Registration Statement on Form S-1 (Registration No. 33-46662) filed
        May 28, 1992
(b)     Form 10-Q for the quarter ended January 31, 1999
(c)     Form 10-Q for the quarter ended January 31, 2007

                                       23
<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.


                                   FINANCIAL FEDERAL CORPORATION
                                   -----------------------------
                                   (Registrant)


                                   By:  /s/ Steven F. Groth
                                        ---------------------------------
                                        Senior Vice President and
                                        Chief Financial Officer
                                        (Principal Financial Officer)


                                   By:  /s/ David H. Hamm
                                        ---------------------------------
                                        Vice President and Controller
                                        (Principal Accounting Officer)

December 8, 2009
----------------
(Date)

                                       24
<PAGE>