FAIRFIELD PROPERTY PORTFOLIO

  Fairfield's  property  portfolio spreads  across some
  of America's  most desired resort  destinations, including
  Colonial  Williamsburg,  Myrtle Beach,  Nashville, Orlando
  and  Branson. As  one of  the oldest  and largest vacation
  ownership companies  in America, we offer  a high level of
  service  and variety  of amenities.  Our  resorts offer  a
  wide  range   of   accommodations,   from   studios   with
  mini-kitchens to  one-, two- or three-bedroom  villas with
  full  kitchens,  fireplaces,  VCRs  and stereos,  washers,
  dryers and even whirlpool tubs.
       
       At Fairfield,  we have  recognized the importance  of
  following and  pro-actively addressing changes  in the way
  Americans plan  and take  their vacations,  and we  remain
  attuned  to meeting the  changing demands  of the evolving
  vacation  industry. These market  demands, as  well as the
  preferences  of  vacationers,   are  key  drivers  in  the
  research and  identification of new vacation destinations.
  Location selection involves extensive  research of tourism
  and   demographic   trends.   Our   increased   focus   on
  constructing  properties in  destination locations reduces
  the need for  developing large-scale amenities  to attract
  vacationers,  thereby  lowering  development  expense  and
  reducing  development  risk. Most  importantly,  the large
  tourist  draws  of  major destinations  provide  our sales
  offices with a steady source of potential customers. 

       Our goal on  any project is  to build  the number  of
  accommodations the market will support.  In most cases, we
  develop a  location in  phases as  market demand  confirms
  the need  for additional inventory.  This approach results
  in a  diversified product  portfolio of resort  offerings,
  which are built to meet  the vacation needs of  our entire
  customer base.

  FAIRFIELD BAY
  
  Fairfield   Bay,  AR  -  This  family  resort  offers  217
  vacation ownership units  in a pristine setting stretching
  over the  beautiful Ozark  foothills. Mountain  Ranch Golf
  Course is  in the  heart of  it all,  and Fairfield  Bay's
  lighted  10-court tennis center  has been  selected as one
  of the top tennis resorts  in the United States  by Tennis
  magazine.  The lush Ozark  National Forest  is perfect for
  family  hiking and  camping,  and  the Ozark  Folk  Center
  features performances and  craft shows and  demonstrations
  year-round. Blanchard Springs Caverns, called "one of  the
  greatest  cave finds of the  20th century,"  is nearby, as
  are the nationally  acclaimed trout fishing waters  of the
  White and Little Red Rivers. The  crown jewel of Fairfield
  Bay, though, is  the magnificent 40,000-acre  Greers Ferry
  Lake, one of  the cleanest, purest lakes  in America. With
  over 300  miles of shoreline, this  lake is  a sportsman's
  dream. Also, the  friendly capital city of Little  Rock is
  easily accessible from the area and can  be an educational
  and enjoyable day trip.

  FAIRFIELD BRANSON

  Branson,  MO -  Once  a  quiet, obscure  Ozark  community,
  Branson is  now being  hailed as  America's Country  Music
  Show  Capital. This  music  mecca entertains  millions  of
  fans and  families drawing  the biggest  names in  country
  and bluegrass music  year-round. Fairfield Branson at  the
  Falls,  our original Branson project, offers 54 units. The
  second  Branson  development,  Fairfield  Branson  at  the
  Meadows, is  partially completed  with a planned  232-unit
  capacity  when  fully  developed.  Both  projects  provide
  convenient access  to the  10-mile stretch  of Highway  76
  where   over   30   indoor   theaters   provide   non-stop
  entertainment,  with  capacities from  500  to 4,000.  The
  Branson/Lakes   area   also   offers   boating,   fishing,
  swimming,   waterskiing,   sailing,   scuba   diving   and
  parasailing  on three beautiful  lakes -  Table Rock, Lake
  Taneycomo  and  Bull  Shoals,  all  complimented by  great
  shopping, dining and  museums. Theme parks such  as Silver
  Dollar  City  and  White  Water  are  among  other  family
  attractions in the area.

  FAIRFIELD FLAGSTAFF

  Flagstaff, AZ  - Nestled  in the  tall pines of  Arizona's
  cool  high  country,  Fairfield  Flagstaff  provides   125
  vacation  ownership  units  in four  wonderful  seasons of
  resort vacationing.  With the Grand  Canyon just 76  miles
  away,  it is  difficult to  imagine a  more impressive  or
  memorable  family   getaway.  Just   25  miles  south   of
  Flagstaff  is the fascinating  artist's colony  of Sedona.
  The  drive  takes  you  through  the  startling  red  rock
  formations  of  the   Oak  Creek  Canyon.  Nearby  Arizona
  Snowbowl

                             <PAGE>


  [This page only includes 3 pictures which are described 
   clockwise as follows:
   
        A picture of VOI buildings at Fairfield Branson at the
        Falls; A picture of red rock formations near Sedona,
        Arizona; A picture of two couples in a VOI unit at
        Fairfield Bay]
                             <PAGE>
                              

  offers a  sky-ride for a  stunning view, as  well as great
  downhill and  cross-country skiing. However,  without even
  leaving the resort  area you can swim, golf,  play tennis,
  go  horseback riding  or lounge  comfortably  in the  cool
  mountain air.  For shoppers,  Flagstaff offers  a host  of
  retail  outlets near popular  northern Arizona sightseeing
  attractions.

  FAIRFIELD GLADE
  
  Fairfield  Glade, TN - The  best of  Southern living comes
  right into your backyard  at Fairfield Glade. Golf is king
  at this  resort, boasting  one 27-hole  and three  18-hole
  PGA  championship   golf  courses.  The  resort   has  358
  vacation  ownership units and  is surrounded  by 11 lakes.
  Hobby  and social  clubs,  arts  and crafts  fairs,  local
  shops and  outlet malls abound.  Nearby Cumberland  County
  Playhouse is  an exciting place  to see a  premier show in
  the evening,  and the on-site riding  stables hold a great
  cool-evening western cookout. Indoor and outdoor  swimming
  pools and indoor  and outdoor tennis courts  are available
  to use,  and  the private  hot tubs  are  a great  way  to
  relax. Nearby  attractions  include the  magnificent  Fall
  Creek  Falls and  Cumberland Mountain  State  Parks, Great
  Smokey  Mountains National Park, as well as Dolly Parton's
  Dollywood  and the American  Museums of  Atomic Energy and
  Fine Arts.

  HARBORTOWN POINT

  Ventura,  CA -  Harbortown  Point  is located  in  Ventura
  Harbor,  California,   between  Santa   Barbara  and   Los
  Angeles. In addition to the many public beaches and  water
  activities  surrounding  the  resort,  on-site  facilities
  include  57  units,   a  heated  swimming  pool   and  two
  glass-enclosed   whirlpools   for   relaxing.   Year-round
  temperatures are in the 70s  and 80s, making this  a prime
  location for  outdoor shopping and  dining. Channel Island
  National  Park, the  only  aquatic  national park  in  the
  continental  United  States,  is  just beyond  Fairfield's
  docks. Harbortown  Point's boat rentals include sailboats,
  fishing boats, paddle boats and boardsails by the hour  or
  overnight.

  FAIRFIELD HARBOUR
  
  New Bern, NC - The banks of the  broad Neuse River are the
  setting  the 207  vacation  ownership units  of  Fairfield
  Harbour. A  scenic Venice-like  canal system  crisscrosses
  much of the  community, and boat rentals,  fishing cruises
  and  golf  are  main  attractions.  Fairfield  Harbour  is
  surrounded  by historical  towns and  attractions, such as
  Bath,  incorporated  in 1705  as  the state's  first town.
  Beaufort, founded in 1709, features excellent  restoration
  of  18th  and 19th  century  homes and  businesses. Nearby
  Tryon Palace  is a  classical Georgian  mansion that  once
  served  as  the  North  Carolina  capitol. The  recreation
  center at Fairfield 

  [This page includes a map of the United States with the
   Fairfield developments identified.]

                            <PAGE> 



  [This page only includes 3 pictures which are described
   clockwise as follows:

        A picture of two golfers on a golf green at Fairfield
        Glade; A picture of a man and woman sitting beside the
        pool at Fairfield Williamsburg at Kingsgate; A picture
        of a sailboat in the marina at Fairfield Harbour.]

                            <PAGE> 

  Harbour includes an indoor and outdoor pool, whirlpool spa,
  exercise  room  with  sauna,  miniature golf,  playground,
  video  game  room and  community center.  The city  of New
  Bern boasts complete shopping  centers, marina facilities,
  fine  restaurants and  nightclubs. It  is  a city  rich in
  history, modern amenities and cordial citizens.

  FAIRFIELD MOUNTAINS
  
  Lake Lure,  NC - This resort offers 215 vacation ownership
  units amid all  of the beauty  and pleasures  of the  Blue
  Ridge  Mountains, just 45  miles east  of Asheville, North
  Carolina.  Lake  Lure and  Bald  Mountain Lake  both offer
  great  bass  fishing,  as  well  as  relaxing  boating and
  beautiful  private  beaches. The  Bald Mountain  and Apple
  Valley  golf courses are open year-round, offering some of
  the  most  beautiful  settings  in the  Southeast.  Guided
  trips are available  to Chimney  Rock Park for  hiking and
  exploring  scenic caves and  waterfalls, as  well as white
  water rafting or  a quiet boat cruise.  Nearby attractions
  include  Oconaluftee   Indian  Village,  a  replica  of  a
  Cherokee  Indian  Village,  and  the  Biltmore  House  and
  Gardens,   a   magnificent   example   of   19th   century
  architecture and craftsmanship. Weekly planned  activities
  include   bingo,  bridge  and   Mountainfest  Night,  with
  storytelling,   music   and  hayrides,   making  Fairfield
  Mountains a great family vacation spot.

  FAIRFIELD MYRTLE BEACH

  Myrtle  Beach,  SC  - The  10-acre  oceanfront  resort  at
  SeaWatch Plantation is  zoned for approximately  640 units
  consisting of a  mixture of condominiums and  hotel units.
  The initial phase will  include 96 VOI units as  well as a
  pool, lagoon  and beach  walk. The  first building of  the
  resort is  expected  to be  ready for  occupancy in  April
  1996, and the entire  first phase  should be completed  in
  approximately   three  years.   Fairfield  Westwinds,  our
  original Myrtle Beach  area project, was built in  1989 in
  North  Myrtle Beach.  The success  we have  met with there
  has prompted  us to develop  SeaWatch Plantation as  well.
  Fairfield  Westwinds  is  a  10-story, 82-unit  oceanfront
  luxury complex on  the white-sand beaches of  North Myrtle
  Beach. The area,  which was rated the second  most popular
  drive destination in  the United States by  the Automobile
  Association of  America Travel Service, averages more than
  14  million  visitors  per year.  With  over  60  miles of
  glistening sand, more  golf courses than anywhere  else on
  earth,  dozens  of  amusement centers  and  miniature golf
  courses, enormous theaters and  shopping centers, hundreds
  of  attractions and  over  a thousand  restaurants, Myrtle
  Beach brings families back time after time. <PAGE>
  

  FAIRFIELD NASHVILLE 
  AT MUSIC CITY, USA
  
  Nashville,  TN -  Fairfield  Nashville  is located  on  13
  acres in the  music center of Nashville,  Tennessee, right
  next   to Opryland.  When complete,  the initial  phase of
  the  resort will  offer approximately  150 units.  Planned
  amenities include  indoor and  outdoor  swimming pools,  a
  health  club,  clubhouse, picnic  tables,  barbecue grills
  and playgrounds. The  Company also expects to  exercise an
  option  on an  adjacent  6-acre  parcel. An  estimated  10
  million  people visited Nashville in 1995, making the area
  an   attractive  fit  with  our  strategy  to  expand  our
  vacation   ownership   network   in  popular   destination
  locations.  This   resort  is  ideally  located  in  close
  proximity  to   all  of  Nashville's   major  attractions,
  including the Grand Ole Opry, the  Opryland Theme Park and
  the Hermitage. 

  FAIRFIELD ORLANDO
  AT CYPRESS PALMS

  Kissimmee, FL  - Fairfield Orlando  at Cypress Palms  puts
  our members in the middle  of the vacation capital  of the
  world, just  minutes away  from this  city's world  famous
  attractions such as WALT DISNEY WORLD[Registered Trademark]
  Resort, Epcot 

  [This page includes a picture of the VOI building at Fairfield
   Myrtle Beach at Westwinds.]

                           <PAGE>


   [This page only includes 3 pictures which are described 
    clockwise as follows:

        A picture of a water ride at a theme park in Myrtle
        Beach; A picture of children playing on the beach 
        near Fairfield Ocean Ridge; A picture of four people
        at the riding stables at Fairfield Glade.]

                           <PAGE>
  
  Center, MGM Studios, Universal Studios  and Sea World. The
  beautiful resort  setting will include  244 units, a  pool
  and whirlpool spa. Orlando and  the surrounding areas also
  offer dozens of other major  amusement parks, exhibits and
  attractions drawing  families all year  long and  bringing
  them back  year after  year. In  fact, 70  percent of  all
  visitors are repeat visitors. And  there are fantastic new
  attractions being added all the time. 

  FAIRFIELD PAGOSA
  
  Pagosa Springs, CO  - This resort  has five  lakes on  the
  property  and is bordered  by two-and-a-half-million acres
  of national forest  and wilderness. The nearby  Wolf Creek
  Ski  Area  is   known  for  receiving  the  most  snow  in
  Colorado. On-site, we have  172 vacation ownership  units,
  27   holes  of  golf,   seven  regulation  tennis  courts,
  mini-golf  and  other  family   activities.  The  resort's
  recreation   center  features  an  indoor  pool,  spa  and
  racquetball  courts,  as well  as  fitness  equipment  and
  aerobics classes. Dining  is available at  several on-site
  restaurants  in  addition  to other  dining  and  shopping
  experiences in the village of Pagosa Springs.

  FAIRFIELD PLANTATION

  Villa Rica, GA - Fairfield Plantation is an  entire resort
  community built  around  the great  Southern tradition  of
  living  a good  life  year-round. Just  45  miles west  of
  Atlanta,  Georgia,   the  resort   features  80   vacation
  ownership  units.  There are  three  lakes  which  provide
  excellent  fishing and water  sports. The  tennis center's
  courts are  lighted  for evening  play,  and there  is  an
  18-hole  golf  course,  a  miniature  golf  course  and  a
  playground.
       
       For  swimming, the resort  has its  own private beach
  and   three  outdoor  pools.  All  resort  units  are  air
  conditioned and  have fully  equipped kitchens.  Some have
  private laundry and hot tubs.

  FAIRFIELD SAPPHIRE VALLEY

  Sapphire,  NC -  Fairfield  Sapphire Valley  includes  194
  vacation   ownership   units,   luxurious  amenities   and
  year-round  fun for  every age  and  interest. The  resort
  lies in  the foothills  of  the Blue  Ridge Mountains,  60
  miles  south  of Asheville,  NC. Opportunities  for family
  backpacking  adventures  are  virtually  unlimited in  the
  Pisgah  National  Forest  and the  Great  Smokey Mountains
  National  Park.  While  the  Horsepasture  and  Tuckasegee
  Rivers are both  nationally known  as outstanding  Eastern
  trout  streams,  the Nantahala  and  Chattooga  Rivers  of
  western North Carolina offer some  of the most challenging
  white  water  rafting   in  the  East.  Sapphire   Stables
  provides   horseback   riders  with   peaceful  excursions
  through the gorgeous countryside. There  is also skiing in
  the winter months and golf the rest of the year.

  FAIRFIELD WILLIAMSBURG
  
  Williamsburg,  VA -  The multi-site  resorts of  Fairfield
  Williamsburg  have  361 units  just  three miles  from the
  world  famous  Colonial Williamsburg  Historic  Area. This
  unique   village  covers   173   acres  of   authentically
  recreated  exhibits. All of the restaurants and shops have
  been restored just as they  were in the 18th  century, and
  fine  crafts come straight  from the  artisan's hands. The
  resort,  designed  to complement  the  historic  area,  is
  located  just 10 miles  from Jamestown,  the first English
  speaking  settlement,  and 15  miles from  Yorktown, where
  the last  battle of  the American  Revolution was  fought.
  Furthermore,  just  three miles  from  the resort  are the
  more  contemporary sights  and thrills  of Busch  Gardens'
  amusement park.

  [This page includes a picture of a man and woman standing on
   a bridge at Treasure Falls near Fairfield Pagosa.]

                             <PAGE>

  [This page only includes 3 pictures which are described 
   clockwise as follows:

        A picture of children playing in a field near the 
        playground at Fairfield Pagosa; A picture of people
        overlooking the Grand Canyon near Fairfield Flagstaff;
        A picture of a VOI building at Fairfield Orlando at 
        Cypress Palms.]

                             <PAGE>
      
      COMMON STOCK PRICES

       Effective  December  20,  1995,  Fairfield's   Common
  Stock began trading  on the New York Stock  Exchange under
  the  symbol FFD.   Prior to  that date, Fairfield's Common
  Stock traded  on The Nasdaq Stock  Market under the symbol
  FFCI.    The  approximate   number  of  recordholders   of
  Fairfield's Common  Stock at January  31, 1996 was  2,900.
  The Company has paid no dividends in the past two years.

       High and  low stock prices during  1995 and 1994 were
  as follows:

                                  1995             1994
                                  ----             ----
        Quarter Ended        High       Low    High       Low
        -------------        -----      ---    ----       --- 
        March 31            $6 1/8    $4 1/2  $6 1/2      $4    
        June 30              6         5 1/4   6 1/4       5 1/4 
        September 30         8 1/4     5 1/2   7           5    
        December 31          8 1/4     5 7/8   6 3/8       4 1/4 

        Certain  of  the   Company's  financing  arrangements
  prohibit the Company from paying  cash dividends or making
  other distributions on its Common Stock.

                              <PAGE>


              FAIRFIELD COMMUNITIES, INC. AND SUBSIDIARIES
                        FINANCIAL HIGHLIGHTS
              DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA 

<TABLE>
                                                                 
                                                        Six Months
                                                          Ended   
                                Year Ended December 31, December 31,
                              -------------------------            
                                 1995    1994      1993     1992  
                                 ----    ----      ----     ----  
  <S>                         <C>       <C>      <C>       <C> 
  OPERATING DATA
    Revenues:          
     Vacation ownership, net  $ 85,460  $ 53,085 $ 33,472  $15,255
     Lots, net                   7,817     7,981    7,399    1,704 
     Resort management          14,554    11,413   10,876    5,145 
     Interest                   19,111    20,366   24,089   14,670 
     Other                      15,209    13,709   14,270    7,062
     Gain on sale of 
       First Federal              -        5,200     -         -    
     Savings and loan 
      operations                  -         -      18,762   10,099
                              --------  -------- --------  -------   
                              $142,151  $111,754 $108,868  $53,935  
                              ========  ======== ========  =======
    Earnings (loss):
     Continuing operations      $8,029   $12,269   $7,170   $1,249   
     Discontinued operations       -        -         -        -      
     Extraordinary credit -  
       gain on discharge 
       of debt                     -        -          -        -           
                                ------   -------   ------   -------
     Net earnings (loss)        $8,029   $12,269   $7,170    $1,249  
                                ======   =======   ======    ======        

  EARNINGS PER SHARE                      
    Primary                       $.72     $1.11     $.65      $.11            
                                  ====     =====     ====      ====
    Fully diluted                 $.69     $1.05     $.61      $.11
                                  ====     =====     ====      ====            

 
|   Six Months
|     Ended       Year Ended                                      
|    June 30,     December 31,  
|     1992           1991 
|     ----           ----  
|
|   <C>            <C>
|   $13,558        $ 34,098
|     1,640           4,104
|     4,756           8,056
|    16,089          37,294
|    10,021          17,790
|
|       -               -   
|
|    13,597          30,935
|   -------        --------
|   $59,661        $132,277
|   =======        ========
|
|  $(13,284)       $(32,780)
|    (6,538)         (2,494)
|
|
|   125,895            -   
|  --------        --------
|  $106,073        $(35,274)
|  ========        ========
|
|
|      *               *   
|      *               *   
</TABLE>
<TABLE>
  BALANCE SHEET DATA       
                                  December 31,        
                         -------------------------------    
                           1995       1994       1993
                           ----       ----       ----          
  <S>                    <C>        <C>        <C>
  Loans receivable, net  $139,674   $139,810   $167,465   
  Total assets            215,518    224,726    245,073     
  Total financing 
   arrangements            86,982    111,943    112,581    
  Liabilities subject to
   reorganization 
    proceedings              -          -          -  
  Stockholders' equity 
   (deficit)               81,227     66,935     47,148  
  Book value per share      $7.64      $6.27      $4.39 

       December 31, 
  ---------------------                                          
    1992    |    1991
    ----    |    ----       
  <C>       |  <C>
  $381,844  |  $454,879    
   586,700  |   685,468
            |
   180,812  |    96,081    
            |
            |
      -     |   218,808    
            |
   36,962   |   (38,322)  
    $3.32   |      *  
</TABLE>

  *     Per  share  amounts   are  neither  comparable   nor
        meaningful due to reorganization.

  Note:     Effective    June   30,    1992,   the   Company
            implemented   "Fresh    Start   Reporting"    in
            connection with  confirmation  of the  plans  of
            reorganization.    No dividends  have  been paid
            during the previous five years.   See Note 13 of
            "Notes  to  Consolidated  Financial  Statements"
            for discussion of the Company's contingencies.

                                <PAGE>


        MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
              CONDITION AND RESULTS OF OEPRATIONS


  RESULTS OF OPERATIONS 

       Vacation Ownership
       ------------------ 

       Gross   revenues  of   vacation  ownership  interests
  ("VOIs") totaled $86.2  million, $52.9  million and  $34.4
  million  for 1995, 1994  and 1993,  respectively.   Of the
  increase in  gross VOI revenues from  1994 to  1995, $15.8
  million   (47.5%)  is  attributable   to  increased  sales
  volumes at the Company's existing  sites and $15.6 million
  (47.0%) is  attributable to  the additional  sales volumes
  at  the  Company's newest  destination  sites  located  in
  Orlando, Florida  and Nashville, Tennessee,  both of which
  began sales  efforts in December  1994.  During 1994,  the
  Company  experienced revenue increases  at several  of its
  developments,  including  its  destination  locations   in
  Myrtle  Beach,   South  Carolina  as   well  as   Branson,
  Missouri, which began sales efforts in June 1993.  

       Net VOI revenues  increased to $85.5 million  for the
  year ended December 31,  1995 from  $53.1 million in  1994
  and $33.5  million  in 1993.    The  increase in  net  VOI
  revenues  is  attributable to  the  same factors  as noted
  above, which was partially  offset, during 1995, by a  net
  deferral of VOI  revenues totaling $.7 million  related to
  the  percentage of completion  method of  accounting.  The
  Company recognized  $.2  million  of  previously  deferred
  revenue  during 1994 as  compared to  net revenue deferred
  of $.9  million  during 1993.    Under the  percentage  of
  completion method  of accounting, the portion  of revenues
  attributable  to  costs  incurred  as  compared  to  total
  estimated  construction  costs  and  selling  expenses  is
  recognized in the period  of sale.  The remaining  revenue
  is  deferred  and   recognized  as  remaining  costs   are
  incurred.  

       Selling
       ------- 

       Selling  expenses,  including  commissions, for  both
  VOI and lot  sales, as a percentage  of related  revenues,
  were  54.1%, 50.6%  and 49.8%,  for 1995,  1994 and  1993,
  respectively.   The  increase in  selling  expenses, as  a
  percentage of  related revenues, is primarily attributable
  to   anticipated   inefficiencies   experienced   at   the
  Company's newest  destination  sites in  Orlando,  Florida
  and   Nashville,  Tennessee.     Exclusive  of  these  new
  projects,  selling expenses,  as a  percentage of  related
  revenues,  were 48.1%  for  the  year ended  December  31,
  1995.   New projects typically experience  lower operating
  margins  in the  "start-up"  phase  of operations  as  the
  Company develops its  property owner base and  establishes
  an  efficient sales  and  marketing  program at  each  new
  location.  Management  continues to work to  improve sales
  efficiencies  at the  Orlando  and Nashville  projects and
  future efficiencies  are expected to  be realized as  both
  of  these  projects  mature  and   expand  their  base  of
  property owners. 

       General and Administrative
       --------------------------
       Increases  in  general  and  administrative  expenses
  during  1995   and  1994   resulted  primarily   from  the
  additional expenses incurred related to  the increased VOI
  sales  volumes as previously discussed.  Additionally, the
  Company  experienced increases  in  expenses in  1994,  as
  compared  to  1993,  related  to  the  Company's  employee
  benefit  plans (see  Note  11  of "Notes  to  Consolidated
  Financial  Statements").    As   a  percentage  of   total
  revenues,  general  and administrative  expenses decreased
  to 8.3% in 1995 from 9.8%  in 1994, exclusive of the  gain
  on  sale  of First  Federal.    During  1993, general  and

                            <PAGE>

  administrative  expenses,   as  a   percentage  of   total
  revenues,  were 10.4%, exclusive  of the  savings and loan
  operations. 

       Gain on Sale of First Federal
       -----------------------------

       In  September  1994,   Fairfield  sold  100%  of  the
  capital  stock   of   First  Federal   Savings  and   Loan
  Association  of  Charlotte  ("First  Federal")  for  $41.0
  million and  recognized a  net gain  on the  sale of  $5.2
  million.  The gain from the sale  of First Federal was not
  subject  to federal  income  tax due  to  a permanent  tax
  basis difference in  First Federal's stock and  underlying
  goodwill.    

       Included in  "Restricted cash and escrow accounts" at
  December  31,  1995 is  $2.9 million  representing certain
  assets  retained and/or pledged to the buyer to securitize
  Fairfield's obligation  to  indemnify  the  buyer  against
  general  indemnities  and  three existing  lawsuits/claims
  which have been  asserted against First Federal  (see Note
  13 of "Notes to Consolidated Financial Statements"). 

       Interest
       -------- 

       Interest income  totaled $19.1 million, $20.4 million
  and $24.1  million in 1995,  1994 and 1993,  respectively.
  The decrease in  interest income is primarily attributable
  to  lower   average  balances   of  contracts   receivable
  outstanding ($135.8  million for 1995, $146.2  million for
  1994  and $177.4  million for  1993).   Loan  originations
  began  to   exceed  principal  collections  in   1995  and
  interest income  is expected  to increase  in tandem  with
  the net increase in contracts receivable.

      Interest expense totaled $8.6 million, $10.5  million
  and  $14.4 million in  1995, 1994  and 1993, respectively.
  These decreases are primarily  attributable   to
  reductions  in   the  average   outstanding  balances   of
  interest-bearing    debt,   resulting    primarily    from
  collections   on   contracts   receivable  exceeding   the
  Company's  cash  requirements.    The average  outstanding
  balance  of   interest-bearing  debt  has  decreased  from
  $191.8  million in  1993  to $137.8  million  in 1994  and
  $94.9  million in 1995.   Exclusive of  First Federal, the
  weighted   average   interest  rate   for   the  Company's
  financing   arrangements   collateralized   by   contracts
  receivable was  8.1%, 8.4%  and 8.6%  for the  years ended
  December 31, 1995, 1994 and 1993, respectively.   

       Other
       -----

       Other revenues  in 1995, 1994  and 1993 include  cash
  distributions  totaling  $1.6 million,  $1.2  million  and
  $2.0  million, respectively, related  to the Company's 35%
  partnership  interest in  Harbour Ridge,  Ltd., a  limited
  partnership engaged in the development of a tract of  land
  in  St. Lucie,  Florida.    Cash distributions  from  this
  partnership  interest are  anticipated  to  continue at  a
  reduced  amount  through 1996;  however,  the amounts  and
  timing of future  distributions are not under  the control
  of the Company, but are entirely within the control of the
  general partner.   

       Also included  in other revenues  and other  expenses
  for  1995  are  home  sales  and  related  cost  of  sales
  totaling $6.7  million  and  $6.0  million,  respectively.
  For  1994, home  sales and related  cost of  sales totaled
  $5.9  million and $5.4 million, respectively, and for 1993
  totaled $4.7 million and $4.4 million, respectively.  

       As  previously noted, the Company began sales efforts
  in  December 1994  at  its  destination sites  located  in
  Orlando,  Florida and Nashville,  Tennessee.   The results
  of operations for 1994 reflect $1.0
  million in start-up expenses  associated with these  sites
  (included in  "Other  expenses" in  the 1994  Consolidated
  Statement  of Earnings).    These expenses  resulted  from
  costs  associated  with establishing  marketing operations
  in  both  projects  prior to  commencement  of  the  prime
  selling  season,   which  normally  corresponds  with  the
  Company's second and third quarters.

                             <PAGE>

  PROVISION FOR INCOME TAXES

       The Company  provides for income  taxes in accordance
  with Statement  of Financial Accounting Standards ("SFAS")
  No. 109,  "Accounting for Income  Taxes".  Under SFAS  No.
  109,  deferred  tax assets  or liabilities  are determined
  based on  the difference between  the financial  reporting
  and tax bases of  assets and  liabilities and enacted  tax
  rates  that will be  in effect for  the year  in which the
  differences are expected to reverse.   Additionally, under
  SFAS No.  109, a valuation  allowance must be  established
  for deferred tax  assets if, based on  available evidence,
  it is "more likely  than not" that all or a portion of the
  deferred tax assets will not be realized.

       Fresh Start Reporting requires the Company  to report
  federal income  tax expense on  income before  utilization
  of  pre-confirmation net operating  loss carryforwards and
  recognition of  the benefit of pre-confirmation deductible
  temporary  differences.     Benefits  realized   from  the
  utilization   of   pre-confirmation  net   operating  loss
  carryforwards   and   recognition    of   pre-confirmation
  deductible   temporary   differences   are   recorded   as
  reductions  of the valuation allowance and as additions to
  paid-in capital.   The Company recorded benefits  from the
  utilization  of  pre-confirmation tax  attributes totaling
  $6.3  million,  $7.5 million  and  $3.0 million  for 1995,
  1994 and 1993, respectively.

       At December 31,  1995, the Company had  net operating
  loss carryforwards  totaling $29.9  million which  reflect
  the amount  available to offset  taxable income in  future
  periods.  Under  limitations imposed  by  Internal Revenue
  Code  Section  382  ("Section   382"),  certain  potential
  changes in ownership of the Company, which may  be outside
  the Company's  knowledge or  control, may  restrict future
  utilization of  these carryforwards.   More  specifically,
  changes in  ownership  occurring  within a  rolling  three
  year period,  taking into  consideration filings with  the
  Securities  and Exchange Commission  on Schedules  13D and
  13G by holders  of 5% or more of Fairfield's Common Stock,
  whether  involving   the  acquisition  or  disposition  of
  Fairfield's   Common   Stock,  may   impose   a   material
  limitation on  the Company's  use of these  carryforwards.
  Available  carryovers, if not utilized, expire as follows:
  2006 - $7.0  million; 2007 -  $14.0 million;  2008 -  $5.5
  million and 2009 - $3.4 million.

       Prior to  1994,  the  Company's deferred  tax  assets
  were reduced by a  100% valuation  allowance based on  the
  lack of a historical earnings  record for the Company  and
  the  uncertainty  as  to the  potential  limitations  that
  could have been imposed  under Section 382 during the two-
  year period  following the effective date  of the plans of
  reorganization.   In 1994,  management determined that  it
  was more  likely than not  that a portion  of the deferred
  tax assets would  be realized.  Management  concluded that
  the  Company had  not  undergone  an ownership  change  as
  defined  under Section  382  during  the two-year  period
  following   the   effective   date   of   the   plans   of
  reorganization  and  would  therefore  realize  a  certain
  portion  of  the deferred  tax  assets through  (i) future
  taxable earnings  and (ii)  the reversal  of deferred  tax
  liabilities  during  periods  in  which  the  Company  has
  available  net  operating  loss  carryforwards  and  other
  deductible temporary differences.  

       The Company  has  reported operating  earnings  since
  the  effective  date of  the  plans of  reorganization and
  management believes that it is  more likely than not  that
  future  taxable earnings will  be sufficient  to realize a
  portion, if not all,  of the tax benefits associated  with
  the  future  deductible  temporary   differences  and  net
  operating loss  carryforwards prior  to their  expiration.
  Reductions  in the valuation  allowance were  based on (i)
  current  realization of  certain  prior year  deferred tax
  liabilities, (ii)  offset of  deferred tax assets  against
  remaining deferred tax  liabilities and (iii)  utilization
  of  deferred  tax  assets  to  offset   estimated  taxable
  earnings  for  the following  year.    Management believes
  that  its projections of the following year's earnings are
  achievable and  provide adequate support for  reducing the
  valuation  allowance.  Future realization of the remaining
  unrealized deferred tax assets will  depend 

                            <PAGE>


  principally on the Company's ability to generate taxable earnings
  sufficient to offset  net operating losses and  deductions
  for  temporary  differences which  comprise  these assets.
  To  the extent  this  realization  of tax  assets  occurs,
  substantially all  of  the valuation  allowance,  totaling
  $20.4 million  at December  31, 1995,  will be  eliminated
  and an equal amount credited to paid-in capital.

  LIQUIDITY AND CAPITAL RESOURCES

       Cash and  cash equivalents  of the  Company decreased
  $11.5  million from  December  31,  1994 to  December  31,
  1995.   This decrease  is primarily  attributable to $22.3
  million  of cash used  by financing  activities, which was
  partially  offset by  $8.7  million  of cash  provided  by
  operating  activities and $2.1 million of cash provided by
  investing activities.  

       Fairfield   offers   financing   for   its   vacation
  ownership  and lot  sales, resulting  in  the creation  of
  installment contracts receivable which  produce cash flows
  as  payments  are  received.    Certain  costs  have  been
  historically funded  to  support  these  sales  (primarily
  development  and  marketing  costs)  from  operating  cash
  flows,  borrowings and  asset  sales, including  sales  of
  contracts receivable.   Fairfield has historically  relied
  upon these sources of funds  to finance timing differences
  between  incurring the  costs to  develop  and market  its
  real estate products  and receiving the proceeds  from the
  sale of  such products.   In the recent  past, the Company
  has  obtained  borrowed  funds  primarily through  various
  revolving credit  agreements and, in  its effort to  lower
  the  costs of  borrowed  funds,  began to  securitize  its
  contracts receivable.  The Company  expects to finance its
  short and long-term cash needs  from (i) contract payments
  generated from  its contracts  receivable portfolio,  (ii)
  operating cash flows,  (iii) borrowings  under its  credit
  facilities as described below and  (iv) future financings,
  including   additional   securitizations    of   contracts
  receivable.

       At December 31,  1995, Fairfield had $4.0  million in
  borrowings  outstanding  under  its  Amended and  Restated
  Revolving Credit Agreement (the "FCI Agreement")  with The
  First  National  Bank   of  Boston  ("FNBB").     The  FCI
  Agreement  provides  for revolving  loans  of up  to $25.0
  million,  including up  to  $7.0  million for  letters  of
  credit.   The revolving loans  mature on January 1,  1998,
  if not  extended in accordance  with the terms  of the FCI
  Agreement.   At December 31, 1995, Fairfield had borrowing
  availability of $18.7 million, net of  outstanding letters
  of credit totaling $1.5 million.

       At December  31, 1995, FAC had borrowings outstanding
  of  $8.8 million  under  its  Third Amended  and  Restated
  Revolving  Credit  Agreement (the  "FAC  Agreement")  with
  FNBB.  The  FAC Agreement provides for revolving  loans of
  up  to  $35.0 million,  including up  to $1.0  million for
  letters of credit.  The revolving loans mature on  January
  1, 1998, if not extended  in accordance with the  terms of
  the  FAC  Agreement,  with  Fairfield  being  a  guarantor
  pursuant to the  FAC Agreement.  At December 31, 1995, FAC
  had borrowing availability of $13.4 million.

  FINANCIAL CONDITION

       Total consolidated  assets of  the Company  decreased
  $9.2 million from December 31, 1994 to December 31,  1995.
  This decrease  is primarily attributable  to (i) an  $11.5
  million  decrease in cash and cash  equivalents and (ii) a
  $7.9  million  decrease  in  net   assets  held  for  sale
  resulting from  the disposal  of certain  of these  assets
  (see  Note  10   of  "Notes   to  Consolidated   Financial
  Statements").   These decreases  were partially offset  by
  (i)  the  purchase  of  real  estate,  for  $6.1  million,
  located   in  Myrtle   Beach,  South   Carolina  and  (ii)
  purchases  of   property  and   equipment  totaling   $3.9
  million.   Total consolidated  liabilities of  the Company
  decreased $23.5  million in  1995 due primarily  to a  net

                             <PAGE>

  reduction   in   the  Company's   financing  arrangements,
  resulting   primarily   from   collections  on   contracts
  receivable exceeding the Company's cash requirements.

       As  previously discussed, in addition to current year
  earnings,  stockholders'  equity  increased  $6.3  million
  representing recorded  benefits  from the  utilization  of
  pre-confirmation  income  tax attributes  (see  Note 7  of
  "Notes to Consolidated Financial Statements"). 

  SEASONALITY

       The Company has historically experienced and  expects
  to continue  to experience  seasonal  fluctuations in  its
  gross  revenues and  net  income from  the  sale of  VOIs,
  which  have been generally higher  in the  period from May
  through   September.      This   seasonality   may   cause
  significant   fluctuations  in   the  quarterly  operating
  results of  the Company.   Furthermore, due  to the timing
  of  construction   of  future  VOI  inventory,  additional
  material fluctuations in operating results may occur.  
  
  IMPACT OF INFLATION

       Although inflation has slowed in  recent years, it is
  still a factor  in our economy and  the Company  continues
  to seek ways  to mitigate its impact.   In general, to the
  extent  permitted  by  competition,  the  Company   passes
  increased  costs  on to  its  customers through  increased
  sales prices.   The value  of a land  parcel is determined
  by  factors  such  as  location, zoning,  topography  and,
  perhaps most importantly, plans for its ultimate  use.  As
  some of these  factors change,  sometimes as  a result  of
  the Company's  own  actions, the  value  of the  land  may
  increase   or   decrease  independently   of  inflationary
  pressures.      Management   believes  that   capitalizing
  interest on  land during  development reasonably  provides
  for increases in land value due to inflation.  Due to  the
  Company's  relatively  high  turnover  rate  in  VOIs  and
  homes,   historical  costs   closely  approximate  current
  costs.  


                           <PAGE>


        REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS




  Stockholders and Board of Directors
  Fairfield Communities, Inc.


       We   have   audited  the   accompanying  consolidated
  balance  sheets   of  Fairfield   Communities,  Inc.   and
  subsidiaries as  of December  31, 1995  and 1994, and  the
  related    consolidated     statements    of     earnings,
  stockholders' equity and cash flows for each of the  three
  years  in  the period  ended  December  31,  1995.   These
  financial  statements  are   the  responsibility  of   the
  Company's management.   Our  responsibility is to  express
  an  opinion on  these financial  statements  based on  our
  audits.

       We conducted our audits in accordance with  generally
  accepted auditing  standards.    Those  standards  require
  that we plan  and perform  the audit to  obtain reasonable
  assurance about whether the financial  statements are free
  of  material misstatement.   An audit  includes examining,
  on  a test  basis,  evidence  supporting the  amounts  and
  disclosures in  the financial statements.   An audit  also
  includes assessing  the  accounting  principles  used  and
  significant  estimates  made by  management,  as  well  as
  evaluating  the overall  financial statement presentation.
  We believe that our audits provide a  reasonable basis for
  our opinion.

       In   our   opinion,   the   consolidated    financial
  statements  referred  to  above  present  fairly,  in  all
  material respects, the consolidated financial position  of
  Fairfield Communities, Inc.  and subsidiaries at  December
  31, 1995 and 1994, and  the consolidated results of  their
  operations  and their  cash flows  for each  of the  three
  years  in   the  period  ended   December  31,  1995,   in
  conformity with generally accepted accounting principles.



                                      ERNST & YOUNG LLP


  Little Rock, Arkansas
  January 29, 1996





                             <PAGE> 


<TABLE>
          FAIRFIELD COMMUNITIES, INC. AND SUBSIDIARIES
                  CONSOLIDATED BALANCE SHEETS
           (DOLLARS IN THOUSANDS, EXCEPT PAR VALUE)

                                
                                       December 31,
                                    1995           1994          
                                    ----          -----   
  <S>                            <C>           <C>
  ASSETS
  Cash and cash equivalents      $  2,095      $ 13,641   
  Loans receivable,net            139,674       139,810   
  Real estate inventories          40,552        32,237
  Restricted cash and 
   escrow accounts                  8,194        10,894   
  Property and equipment,net        8,311         5,956    
  Net assets held for sale            -           7,943   
  Other assets                     16,692        14,245         
                                 --------      -------- 
                                 $215,518      $224,726   
                                 ========      ======== 
     
  LIABILITIES AND STOCKHOLDERS' EQUITY 
  Liabilities:
    Financing arrangements       $ 86,982      $111,943       
    Deferred revenue               19,791        18,956       
    Accounts payable                4,556         6,305       
    Accrued interest                4,504         5,404       
    Net liabilities of assets held 
     for sale                       2,267          -           
    Other liabilities              16,191        15,183    
                                 --------      --------   
                                  134,291       157,791   
                                 --------      --------    
    
  Stockholders' Equity:   
    Common stock, $.01 par value,
     25,000,000 shares authorized, 
     12,325,848 shares issued in 
     1995 and 12,359,037 in 1994      124           124    
    Paid-in capital                52,386        46,123    
    Retained earnings              28,717        20,688    
    Less treasury stock, at cost, 
     2,395,295 shares                -             -       
                                 --------      --------   
                                   81,227        66,935    
                                 --------      --------  
                                 $215,518      $224,726    
                                 ========      ========    
</TABLE>





  See notes to consolidated financial statements.


                                <PAGE> 

<TABLE>
              FAIRFIELD COMMUNITIES, INC. AND SUBSIDIARIES
                CONSOLIDATED STATEMENTS OF EARNINGS
          (DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
                                                                 
                               Year Ended December 31,     
                            ----------------------------   
                              1995       1994       1993
                              ----       ----       ---- 
  <S>                       <C>        <C>       <C>        
  REVENUES
    Vacation ownership, net $ 85,460   $ 53,085  $ 33,472
    Lots, net                  7,817      7,981     7,399
    Resort management         14,554     11,413    10,876
    Interest                  19,111     20,366    24,089
    Other                     15,209     13,709    14,270
    Gain on sale of 
     First Federal, net         -         5,200      -   
    Savings and loan 
     operations                 -          -       18,762
                            --------   --------  -------- 
                             142,151    111,754   108,868
                            --------   --------  -------- 
  EXPENSES
   Cost of sales:
     Vacation ownership       23,838     14,958     9,275
      Lots                     1,970      1,855     1,705
    Provision for loan losses  6,505      4,430     3,252
    Selling                   50,738     31,176    20,715
    Resort management         13,106      9,991    11,057
    General and 
     administrative           11,844     10,456     9,390
    Interest                   8,562     10,528    14,449
    Other                     12,550     13,213     9,353
    Savings and loan 
     operations                 -          -       19,345
                            --------   --------  --------   
                             129,113     96,607    98,541
                            --------   --------  --------
  Earnings before provision 
   for income taxes           13,038     15,147    10,327
  Provision for income taxes   5,009      2,878     3,157
                            --------   --------  --------      
  Net earnings              $  8,029   $ 12,269  $  7,170
                            ========   ========  ========
               
  NET EARNINGS PER SHARE
    Primary                     $.72      $1.11      $.65
                                ====      =====      ====   
    Fully diluted               $.69      $1.05      $.61
                                ====      =====      ==== 

  WEIGHTED AVERAGE SHARES OUTSTANDING
    Primary               11,079,789 11,069,267 11,037,765
                          ========== ========== ========== 
    Fully diluted         11,688,066 11,673,734 11,692,667
                          ========== ========== ==========
</TABLE>
   See notes to consolidated financial statements.


                              <PAGE> 



<TABLE>
                 FAIRFIELD COMMUNITIES, INC. AND SUBSIDIARIES
               CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                             (DOLLARS IN THOUSANDS)



                                    Common  Paid-in   Retained                
                                    Stock   Capital   Earnings   Total    
                                    ------  -------   -------    -----
  <S>                              <C>      <C>       <C>      <C>
  Balance, January 1, 1993         $   124  $35,589   $ 1,249  $36,962   
    Net earnings                       -       -        7,170    7,170   
    Utilization of pre-confirmation
      income tax attributes            -      3,016       -      3,016   
                                   -------  -------   -------  -------
  Balance, December 31, 1993           124   38,605     8,419   47,148   
    Net earnings                       -       -       12,269   12,269   
    Utilization of pre-confirmation
      income tax attributes            -      7,518      -       7,518
                                   -------  -------   -------  -------   
  Balance, December 31, 1994           124   46,123    20,688   66,935   
    Net earnings                       -       -        8,029    8,029   
    Utilization of pre-confirmation
      income tax attributes            -      6,263      -       6,263
                                   -------  -------   -------  -------   
  Balance, December 31, 1995       $   124  $52,386   $28,717  $81,227   
                                   =======  =======   =======  =======
</TABLE>









  See notes to consolidated financial statements.


                                <PAGE> 

<TABLE>
              FAIRFIELD COMMUNITIES, INC. AND SUBSIDIARIES
               CONSOLIDATED STATEMENTS OF CASH FLOWS
                       (DOLLARS IN THOUSANDS)
                                                                 
                                Year Ended December 31, 
                             ----------------------------     
                              1995        1994       1993
                              ----        ----       ----
  <S>                      <C>         <C>         <C>
  OPERATING ACTIVITIES:
   Net earnings            $  8,029    $ 12,269    $  7,170
   Adjustments to reconcile 
    net earnings to net cash 
    provided by operating 
    activities: 
     Depreciation and 
      amortization            2,131       1,259       1,937
     Provision for loan 
      losses                  6,505       4,430       3,252
     Utilization of pre-
      confirmation income
      tax attributes          6,263       7,518       3,016
     Earnings from 
      unconsolidated 
      affiliates             (1,588)     (1,236)     (1,996)
     Gain on sale of 
      First Federal            -         (5,200)       -   
   Changes in operating 
    assets and liabilities:
     Real estate inventories (8,645)        220       8,885
     Other                   (4,041)     (6,333)    (12,764)   
                            -------     -------    -------- 
     Net cash provided by 
     operating activities     8,654      12,927       9,500
                            -------     -------    -------- 
  INVESTING ACTIVITIES:
   Purchases of property 
    and equipment, net       (3,384)       (572)     (1,095)
   Principal collections 
    on loans receivable      73,943      73,189     131,543
   Originations of loans 
    receivable              (79,461)    (51,877)   (131,598)
   Cash distributions  
    from unconsolidated 
    affiliates                1,588       1,236       2,572
   Net investment activities 
    of net liabilities of 
    assets held for sale      9,375      (9,563)    (11,665)
   Net cash used on sale 
    of First Federal           -        (17,666)       -   
   Net investing activities 
    related to savings and 
    loan operations            -           -         22,904
                           --------    --------     -------
   Net cash provided by 
    (used in) investing 
    activities                2,061      (5,253)     12,661
                           --------     -------    --------   
  FINANCING ACTIVITIES:
   Proceeds from financing 
    arrangements            226,870     219,744     138,297
   Repayments of financing 
    arrangements           (251,831)   (220,627)   (187,331)
   Net decrease (increase) 
    in restricted cash 
    and escrow accounts       2,700       2,375      (9,497)
   Net financing activities 
    related to savings and
    loan operations            -           -        (20,076)
                          ---------   ---------   --------- 
   Net cash (used in) 
    provided by financing 
    activities              (22,261)      1,492     (78,607)
                          ---------   ---------   --------- 
   Net (decrease) increase 
    in cash and cash 
    equivalents             (11,546)      9,166     (56,446)
   Cash and cash equivalents, 
    beginning of period      13,641       4,475      60,921
                           --------    --------    --------
   Cash and cash equivalents, 
    end of period          $  2,095    $ 13,641    $  4,475
                           ========    ========    ========     
</TABLE>


   See notes to consolidated financial statements.

                                <PAGE> 



          FAIRFIELD COMMUNITIES, INC. AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                      DECEMBER 31, 1995

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING 
------   --------------------------------------------------
         POLICIES
         --------

Organization
------------
     Fairfield Communities, Inc.  ("Fairfield" and  together
with its subsidiaries, the "Company") is one of the nation's
largest vacation ownership  companies.  The  Company markets
vacation products and  manages resort  properties in  eleven
states,  providing quality  recreational experiences  to its
property owners.
  
     The Company's primary business is  the sale of vacation
ownership interests ("VOIs"),  popularly known as timeshare,
at its various properties situated either in popular tourist
locations or in proximity to other scenic resort areas.  The
Company  offers financing  for  VOI and  homesite  purchases
through  a  wholly  owned  subsidiary,  Fairfield Acceptance
Corporation  ("FAC"),  generating high-quality, medium-term
contracts  receivable  with attractive  yields.    FAC holds
these  contracts in  its portfolio  and, in  some instances,
securitizes and sells them to third parties.

Principles of Consolidation
---------------------------
     The  consolidated  financial  statements   include  the
accounts  of Fairfield  and  its wholly  owned subsidiaries.
All significant intercompany balances and  transactions have
been eliminated in  consolidation.  Certain  amounts in  the
consolidated financial statements  of prior years have  been
reclassified to conform to the 1995 presentation.  

Use of Estimates
----------------

     The   preparation   of   the   consolidated   financial
statements  in conformity with generally accepted accounting
principles  requires   management  to  make   estimates  and
assumptions  that   affect  the  amounts  reported   in  the
consolidated  financial  statements and  accompanying notes.
Actual results could differ from those estimates.

Fresh Start Reporting
---------------------
     In   1990,   Fairfield   and    twelve   wholly   owned
subsidiaries  filed  voluntary petitions  for reorganization
under Chapter 11 of  the United States Bankruptcy  Code and,
in August  1992, the bankruptcy court  confirmed the Amended
and Restated  Joint Plans  of Reorganization  (the "Plans").
As of June 30, 1992, the Company implemented the recommended
accounting for  entities  emerging from  reorganization  set
forth in Statement of Position 90-7, "Financial Reporting by
Entities in Reorganization Under the Bankruptcy Code" issued
by the  American Institute  of Certified Public  Accountants
("Fresh  Start  Reporting").    Accordingly,  the  Company's
assets  and  liabilities  were  adjusted  to  reflect  their
estimated  fair  values  and  the  accumulated  deficit  was
eliminated.  

Impact of Recently Issued Accounting Standards
----------------------------------------------
     During   1995,   the  Company   adopted   Statement  of
Financial Accounting Standards ("SFAS") No. 121, "Accounting
for the  Impairment of Long-Lived Assets  and for Long-Lived
Assets to be Disposed Of".  In accordance with SFAS No. 121,
impairment losses  are recognized on long-lived  

                          <PAGE>

assets used in operations when indicators of impairment are present  
and the  undiscounted cash  flows estimated  to be  generated by
those assets  are less  than  the assets'  carrying  amount.
Long-lived assets held for disposal are carried at the lower
of  the carrying  amount of  the asset  or fair  value, less
estimated selling costs.   The adoption of SFAS No.  121 had
no   impact   on   the   Company's   consolidated  financial
statements.

Cash and Cash Equivalents
-------------------------

     The  Company  considers all  highly  liquid investments
with a maturity of three months or less when purchased to be
cash equivalents.

Property and Equipment
----------------------
     Property  and   equipment  are  recorded  at  cost  and
depreciated  primarily by the  straight-line method based on
the estimated useful lives of the assets, ranging  generally
from 10 to 25 years for buildings and from two to seven years for
machinery,   fixtures  and   equipment.      Additions   and
improvements are  capitalized while maintenance  and repairs
are   expensed   as  incurred.      Asset   and  accumulated
depreciation  accounts  are relieved  for  dispositions with
resulting gains or losses reflected in operations.  

Deposits and Deferred Selling Costs
-----------------------------------

     Until  a  contract  for   sale  qualifies  for  revenue
recognition,  all payments  received  are accounted  for  as
deposits.   Commissions  and other  selling costs,  directly
attributable to  the sale,  are deferred  until the  sale is
recorded.  If a contract is cancelled before qualifying as a
sale, nonrecoverable selling expenses are charged to expense
and deposits forfeited are credited to income.

Real Estate Inventories
-----------------------
     Real  estate  inventories are  valued  at the  lower of
cost or estimated net realizable value.  Costs include land,
land  improvements, capitalized  interest and a  portion of
the costs of amenities  constructed for the use  and benefit
of property owners.  

     Land  and  improvement  costs  are  allocated  for  the
purpose of  accumulating costs  to match with  related sales
revenues.   The Company  allocates acquisition and  carrying
costs  to these areas on the acreage  or the value basis, as
appropriate.     Improvement  costs  in  each   project  are
allocated   to  the   appropriate   areas  on   a   specific
identification basis.   Certain amenity costs  are allocated
on an acreage or benefit basis, as appropriate.

     Unexpended costs  for committed  improvements to  areas
from  which lots  have been  sold are  calculated  using the
Company's projections of the  timing and cost of work  to be
completed, including an  inflation factor.  The  projections
are  reviewed  and  refined   periodically  based  on   work
completed and  current plans for development.  The effect of
these revised cost estimates is recognized prospectively.

Allowance for Loan Losses
-------------------------
     Contracts
     ---------
     The  Company's  contracts  receivable   are  regionally
diversified.   A minimum  down payment of 15%  is  generally
required for  purchases  financed by  contracts  receivable.
The Company provides for losses on contracts receivable by a
charge against earnings at the time  of sale at a rate based
upon  historical  cancellation  experience and  management's
estimate of future losses.  

                             <PAGE>

     When  a contract is  cancelled in a  year subsequent to
the year  in which  the  underlying sale  was recorded,  the
outstanding balance, less  recoverable costs, is  charged to
the allowance for loan losses.  When a contract is cancelled
in the same year as the related sale, all entries applicable
to the sale are reversed and nonrecoverable selling expenses
are  charged   to  operations.    For   financial  statement
purposes, contracts receivable are considered delinquent and
fully  reserved  if  a  payment  remains  unpaid  under  the
following conditions:

                   Percent of Contract     Delinquency
                        Price Paid            Period 
                   -------------------     -----------    
                   Less than 25%             90 days
                   25% but less than 50%    120 days 
                   50% and over             150 days

     Mortgages
     ---------
     The Company's  mortgages receivable consist of  a small
number of non-homogeneous loans collateralized  primarily by
real estate geographically dispersed throughout the country.
The allowance for  mortgages receivable is  maintained at  a
level believed adequate  by management based  on a  periodic
evaluation   of  each  mortgage  receivable.    Management's
evaluation of  the adequacy  of this  allowance is  based on
past loss experience, known inherent risks in the portfolio,
adverse situations that may affect the borrower's ability to
repay  (including  the  timing  of   future  payments),  the
estimated value of any underlying collateral, composition of
the   mortgage   receivable   portfolio,  current   economic
conditions and other relevant factors.  This evaluation  is
inherently  subjective  as  it  requires  material estimates
including the amounts and timing of future cash flows.

Revenue and Profit Recognition
------------------------------
     Vacation Ownership Interests
     ----------------------------
     VOIs consist  of either  specified fixed  week interval
ownership  or  undivided  fee  simple  interests  in  fully-
furnished vacation homes.   Generally, VOIs  are sold  under
installment sales contracts which provide for a down payment
and monthly installments, including interest, for periods of
up to seven years.   Sales of VOIs are included in  revenues
when  a 10%  minimum down  payment (including  interest) has
been  received.    Revenue  relating to  sales  of  VOIs  in
projects   under  construction   is  recognized   using  the
percentage  of completion  method.   Under this  method, the
portion  of   revenues  applicable  to  costs  incurred,  as
compared  to total estimated  construction costs and selling
expenses,  is  recognized  in  the  period  of  sale.    The
remaining  revenue   is  deferred  and   recognized  as  the
remaining costs are incurred.

     Homes/Property Sales
     --------------------

     Homes sales are  included in revenues when  the unit is
complete, ready  for occupancy  and title is  transferred to
the  buyer.  Sales of bulk acreage are recognized when title
has  passed   to   the  buyer,   the  Company's   continuing
involvement in  the property is limited,  if not eliminated,
and  sufficient nonrefundable  funds  have been  received to
reasonably assure the continuing commitment of the buyer.  

Earnings Per Share
------------------ 
     Primary earnings  per share  is computed  based on  the
estimated  weighted  average  number of  common  shares  and
common  equivalent shares  deemed  to be  outstanding.  Such
shares include  those 

                            <PAGE>

shares  issued  as authorized  by  the Plans plus
the additional  shares  estimated to  be  issued
based on the resolution of the remaining allowed claims (see
Note 8).  This  aggregate number of shares has  been reduced
by  the shares held in  treasury.  The  computation of fully
diluted earnings  per share further includes  588,235 shares
which have been reserved, but not issued, for the benefit of
the holders of the Senior Subordinated Secured Notes. 

Income Taxes
------------

     The Company  provides for  income  taxes in  accordance
with  SFAS No.  109, "Accounting for  Income Taxes."   Under
SFAS  No.  109,  deferred  tax  assets  or  liabilities  are
determined based  on  the difference  between the  financial
reporting  and  tax  bases  of assets  and  liabilities  and
enacted  tax rates that  will be in  effect for the  year in
which    the   differences   are    expected   to   reverse.
Additionally, under SFAS No. 109, a valuation allowance must
be  established  for  deferred   tax  assets  if,  based  on
available evidence, it is "more likely than not" that all or
a portion of the  deferred tax assets will not  be realized.

     Fresh Start Reporting  requires the  Company to  report
federal income  tax expense on income  before utilization of
pre-confirmation  net  operating   loss  carryforwards   and
recognition  of the  benefit of  pre-confirmation deductible
temporary   differences.     Benefits   realized  from   the
utilization   of   pre-confirmation   net   operating   loss
carryforwards and recognition of pre-confirmation deductible
temporary  differences  are recorded  as  reductions  of the
valuation allowance and as additions to paid-in capital.

Stock-based Compensation
------------------------

     Fairfield  grants  non-qualified   stock  warrants   to
certain key  employees and  directors to purchase  shares of
its Common Stock  at prices  not less than  the fair  market
value of  such shares  at the date  of grant.   The  Company
accounts for  these stock warrant grants  in accordance with
APB  Opinion  No.  25,   "Accounting  for  Stock  Issued  to
Employees"  and,  accordingly,  recognizes  no  compensation
expense for the stock warrant grants.  

NOTE 2 - LOANS RECEIVABLE
------   ----------------
     Loans  receivable  consisted   of  the  following   (In
thousands):
<TABLE>
                                       December 31,
                                    1995         1994
                                    ----         ----
<S>                               <C>          <C>
Contracts                         $140,810     $139,091
Mortgages                           13,064       12,041
                                  --------     --------
                                   153,874      151,132
Less allowance for loan losses     (14,200)     (11,322)
                                  --------     --------
                                  $139,674     $139,810
                                  ========     ========
</TABLE>
       
     The  weighted  average  stated interest  rates  on  the
Company's contracts  receivable  were  13.2%  and  12.6%  at
December  31,  1995 and  1994,  respectively,  with interest
rates on these receivables ranging generally from 10.75%  to
16.0%.   Contractual maturities of these receivables  within
the next five years are  as follows:  1996 -  $33.6 million;
1997 - $26.5  million; 1998  - $21.4 million;  1999 -  $17.7
million  and 2000 - $15.5  million.  The Company's contracts
receivable were 97.9% and 98.1% current on a 30-day basis as
of December  31,  1995  and  1994,  respectively.    Amounts
charged against  the  allowance  for  loan  losses,  net  of
recoveries, totaled  $3.6  million and  $4.1 million  during
1995 and 1994, respectively.  

                            <PAGE>

NOTE 3 - VACATION OWNERSHIP REVENUES
------   ---------------------------

     Vacation  ownership revenues are  summarized as follows
(In thousands):
<TABLE>
                                  Year Ended December 31,     
                                 ------------------------     
                                 1995      1994       1993
                                 ----      ----       ----
<S>                            <C>       <C>        <C>
Vacation ownership revenues    $86,188   $52,904    $34,405
   Less:  Deferred revenue on 
          current year sales,
           net                  (2,648)   (1,920)    (2,101)
   Add:  Revenue recognized on 
          prior year sales       1,920     2,101      1,168
                               -------   -------    ------- 
                               $85,460   $53,085    $33,472
                               =======   =======    =======   
</TABLE>
 
NOTE 4 - REAL ESTATE INVENTORIES
------   -----------------------
     Real estate inventories  are summarized as  follows (In
thousands):
<TABLE>
                                      December 31,     
                                   1995         1994 
                                   ----         ---- 
<S>                              <C>          <C>
Land:
  Under development              $17,377      $ 4,575  
  Undeveloped                      7,288       17,633  
                                 -------      ------- 
                                  24,665       22,208  
                                 -------      -------
Residential housing:                                        
  Vacation ownership              13,247        8,418 
  Homes                            2,640        1,611
                                 -------      -------  
                                  15,887       10,029 
                                 -------      -------
                                 $40,552      $32,237
                                 =======      =======     
</TABLE>

     In 1995, the  Company began  development at  two of  its
newest  destination  sites,   and  therefore,  the   related
acquisition  costs were  reclassed from undeveloped  land to
land  under   development.     Additionally,   the   Company
purchased, for $6.1 million in cash, real estate located  in
Myrtle Beach, South Carolina.

NOTE 5 - FINANCING ARRANGEMENTS
------   ----------------------

     Financing  arrangements are  summarized as  follows  (In
thousands):
<TABLE>
                                       December 31,   
                                     1995        1994
                                     ----        ----
   <S>                             <C>         <C>
   Borrowings collateralized by 
     contracts receivable:
       FFC Notes                   $47,026     $ 73,560 
       FCC Notes                    14,200         -     
   Notes payable                    12,919       14,708     
   Revolving credit agreements      12,837       23,675 
                                   -------     -------- 
                                   $86,982     $111,943 
                                   =======     ========
</TABLE>

                           <PAGE>

     Borrowings Collateralized by Contracts Receivable
    --------------------------------------------------

     At  December  31,  1995,  Fairfield Funding  Corporation
("FFC"), a  wholly owned  subsidiary of FAC,  had borrowings
outstanding totaling $47.0 million under a private placement
of  7.6% Notes (the "FFC Notes").  The FFC Notes are secured
by and payable from a pool of contracts receivable purchased
from  FAC  pursuant to  the  Receivables Purchase  Agreement
among  Fairfield as originator,  FAC as seller  and FFC as
purchaser.   At  December  31,  1995,  contracts  receivable
totaling $61.7 million collateralized the FFC Notes. 

     In  1995,  Fairfield  Capital  Corporation,  ("FCC"),  a
wholly owned  subsidiary  of  FAC,  entered  into  a  Credit
Agreement  (the   "FCC   Agreement")  which   provided   for
borrowings  of up to $21.4 million (the "FCC Notes") for the
purchase of contracts  receivable from FAC  pursuant to  the
Receivables   Purchase   Agreement,   among   Fairfield   as
originator,  FAC  as seller  and  FCC as  purchaser.   The
initial purchase  of contracts receivable and the respective
funding under  the FCC  Agreement  occurred in  April  1995,
resulting  in borrowings  under the  FCC Agreement  totaling
$21.4 million,  of which  $20.3 million  was used  to reduce
borrowings under  FAC's revolving credit agreement  and $1.1
million was  used  to  establish  restricted  cash  accounts
required by the FCC  Agreement and to pay transaction  fees.
Borrowings under  the FCC Agreement mature  in December 1999
and bear  interest at  varying  rates, based  on  commercial
paper rates, subject to an interest rate cap of 8.5%.  As of
December 31, 1995, the weighted average interest rate on the
FCC  Notes  was  6.675%, including  facility  fees  totaling
 .675%.  At December 31, 1995, contracts receivable  totaling
$16.7 million collateralized the FCC Notes.

     At December 31, 1995, restricted cash accounts  totaling
$3.0 million  were required  to be maintained  in accordance
with the terms  of the FCC Notes and FFC  Notes.  Maturities
of borrowings collateralized by contracts  receivable within
the  next five years are  as follows: 1996  - $24.4 million;
1997  -  $16.3 million;  1998 -  $9.2  million; 1999  - $5.7
million and 2000 - $5.6 million.

     Notes Payable
    ------------- 
     At December 31, 1995, notes payable consisted  primarily
of (i) an unsecured  note payable totaling $6.4  million and
(ii) other obligations  collateralized primarily by property
and  equipment and  mortgages receivable.   At  December 31,
1995, the weighted  average interest rate  on notes  payable
was  9.8%.  Maturities of notes payable within the next five
years  are  as follows:  1996 -  $0.8  million; 1997  - $2.6
million; 1998 - $3.5 million; 1999 - $3.9 million and 2000 -
$1.5 million.

     Revolving Credit Agreements
     --------------------------

     At  December 31,  1995, Fairfield  had $4.0  million  of
borrowings  outstanding  under  its  Amended   and  Restated
Revolving  Credit Agreement (the  "FCI Agreement")  with The
First  National Bank of Boston ("FNBB").   The FCI Agreement
provides  for  revolving  loans  of  up  to  $25.0  million,
including up to  $7.0 million  for letters of  credit.   The
borrowings  under  the   FCI  Agreement  are  collateralized
primarily by contracts receivable, which had a book value of
$30.1  million at  December 31, 1995,  and bear  interest at
FNBB's base rate  plus .875% (9.38%  at December 31,  1995).
The FCI Agreement also  provides for an annual facility  fee
of  .625% of  the  total commitment.    The revolving  loans
mature on January  1, 1998,  if not  extended in  accordance
with the terms of the FCI Agreement.   At December 31, 1995,
Fairfield had borrowing availability  of $18.7 million,  net
of outstanding letters of credit totaling $1.5 million.

                             <PAGE>


     At December 31, 1995, FAC had borrowings outstanding  of
$8.8 million under its  Third Amended and Restated Revolving
Credit Agreement (the "FAC  Agreement") with FNBB.  The  FAC
Agreement  provides  for  revolving  loans of  up  to  $35.0
million, including up to $1.0 million for letters of credit.
The  borrowings under the  FAC Agreement  are collateralized
primarily by contracts receivable, which had a book value of
$28.6 million  at December  31, 1995,  and bear interest  at
FNBB's base  rate plus  .25% (8.75%  at December  31, 1995).
The FAC Agreement also provides  for an annual facility  fee
of  .5% of the total commitment.  The revolving loans mature
on January 1, 1998,  if not extended in accordance  with the
terms of the FAC Agreement, with Fairfield being a guarantor
pursuant  to the FAC Agreement.   At December  31, 1995, FAC
had borrowing availability of $13.4 million.  

NOTE 6 - DEFERRRED REVENUE - ESTIMATED COSTS TO DEVELOP LAND
------   --------------------------------------------------
         SOLD
         ----
     At   December  31,  1995,  estimated  cost  to  complete
development work in  subdivisions from which  lots had  been
sold totaled $14.7 million.  The estimated costs to complete
development work within the next five years are as  follows:
1996  - $1.0  million;  1997 -  $1.2  million; 1998  -  $1.1
million; 1999 - $0.7 million and 2000 - $0.6 million.

NOTE 7 - INCOME TAXES
------   ------------

     At  December 31,  1995, the  Company had  net  operating
loss carryforwards totaling $29.9 million  which reflect the
amount available to offset taxable income in future periods.
Under  limitations imposed by  Internal Revenue Code Section
382 ("Section 382"), certain  potential changes in ownership
of the Company, which may be outside the Company's knowledge
or  control,  may  restrict   future  utilization  of  these
carryforwards.   More  specifically,  changes  in  ownership
occurring within  a rolling  three-year period,  taking into
consideration  filings  with  the  Securities  and  Exchange
Commission on Schedules 13D and 13G by holders of 5% or more
of   Fairfield's  Common   Stock,   whether  involving   the
acquisition or disposition of Fairfield's Common Stock,  may
impose  a material limitation on  the Company's use of these
carryforwards.    Available  carryovers,  if  not  utilized,
expire  as follows:    2006 -  $7.0  million; 2007  -  $14.0
million; 2008 - $5.5 million and 2009 - $3.4 million.

      Components  of the  provision  for  income taxes  are as
follows (In thousands):

<TABLE>
                               Year Ended December 31,      
                             --------------------------  
                               1995      1994     1993  
                               ----      ----     ----
<S>                          <C>        <C>      <C>
Current:
  Federal                    $  290     $  -     $ -        
  State                         543       257         4     
                             ------    ------    ------ 
                                833       257         4     
                             ------    ------    ------   
Deferred:
  Federal                     3,880     2,422     2,770     
  State                         296       199       383   
                             ------    ------    ------     
                              4,176     2,621     3,153 
                             ------    ------    ------     
                             $5,009    $2,878    $3,157   
                             ======    ======    ======     
Utilization of pre-confirmation
  income tax attributes      $6,263    $7,518    $3,016   
                             ======    ======    ======     
</TABLE>

                          <PAGE>

     Components  of the  variance between  taxes computed  at
the  expected  federal statutory  income  tax  rate and  the
provision for income taxes are as follows (In thousands):

<TABLE>
                              Year Ended December 31,
                            --------------------------      
                           1995        1994        1993
                           ----        ----        ----   
<S>                       <C>        <C>          <C>
Statutory tax provision   $4,563     $ 5,150      $3,511
State income taxes, net 
  of federal benefit         545         301         255
Gain on sale of 
 First Federal               -        (2,277)        -    
Other                        (99)       (296)       (609)  
                          ------     -------      ------
Provision for 
 income taxes             $5,009     $ 2,878      $3,157
                          ======     =======      ====== 
</TABLE>

     Significant  components of  the Company's  deferred  tax
assets  (deductible temporary differences)  and deferred tax
liabilities (taxable temporary differences) consisted of the
following (In thousands):

<TABLE>
                                          December 31,
                                       1995        1994 
                                       ----        ----  
<S>                                  <C>         <C>
Deferred tax assets:
  Net operating loss carryforwards   $ 11,499    $ 16,767
  Loan and cancellation 
   loss reserves                        5,456       4,358
  Tax over book basis in inventory      3,267       3,092
  Deferred revenue                      2,428       2,435
  Credit carryforwards                  2,172       1,882
  Other                                 1,806       2,065
                                     --------    -------- 
                                       26,628      30,599
Valuation allowance                   (20,415)    (26,131)
                                     --------    --------
                                        6,213       4,468
                                     --------    --------
Deferred tax liabilities:
  Basis in partnership assets           1,076       1,380
  Other                                   131         169
                                     --------    -------- 
                                        1,207       1,549
                                     --------    -------- 
Net deferred tax assets              $  5,006    $  2,919
                                     ========    ========
</TABLE>

  
     Prior to  1994, the Company's  deferred tax assets  were
reduced by a 100% valuation allowance based on the lack of a
historical  earnings   record  for   the  Company   and  the
uncertainty as to the  potential limitations that could have
been imposed under  Section 382 during  the two-year  period
following the effective date of the plans of reorganization.
In  1994, management determined that it was more likely than
not  that  a portion  of the  deferred  tax assets  would be
realized.   Management  concluded that  the Company  had not
undergone an  ownership change as defined  under Section 382
during the  two-year period following the  effective date of
the plans  of reorganization  and would therefore  realize a
certain  portion  of the  deferred  tax  assets through  (i)
estimated future  taxable earnings and (ii)  the reversal of
deferred tax liabilities during periods in which the Company
has available  net  operating loss  carryforwards and  other
deductible temporary differences.  

     The Company has  reported operating  earnings since  the
effective date of the plans of reorganization and management
believes that it is more likely than not that future taxable
earnings will  be sufficient  to realize  a portion, if  not
all, of the tax benefits associated with the future deductible

                          <PAGE>

temporary  differences  and  net  operating loss
carryforwards prior to their expiration.  Reductions in  the
valuation allowance were based on (i) current realization of
certain prior year deferred tax liabilities, (ii) offset  of
deferred   tax   assets  against   remaining   deferred  tax
liabilities and (iii) utilization of deferred tax assets  to
offset estimated  taxable earnings  for the  following year.
Management believes  that its projections  of the  following
year's earnings are achievable  and provide adequate support
for reducing the valuation allowance.  Future realization of
remaining  unrealized   deferred  tax  assets   will  depend
principally  on the  Company's ability  to  generate taxable
earnings  sufficient  to  offset  net  operating losses  and
deductions  for temporary  differences which  comprise these
assets.    To  the  extent this  realization  of  tax assets
occurs,   substantially  all  of  the  valuation  allowance,
totaling  $20.4  million  at  December  31,  1995,  will  be
eliminated and an equal amount credited to paid-in capital.

NOTE 8 - STOCKHOLDERS' EQUITY
------   --------------------
     Pursuant  to  the  Plans,   all  of  the   common  stock
outstanding  prior to reorganization was cancelled effective
September 1, 1992.  Thereafter, Fairfield began issuing  new
stock and is authorized to issue 25,000,000 shares of Common
Stock, par  value $.01  per share,  and 5,000,000 shares  of
Preferred  Stock, par  value $.01  per share.   One  million
shares of preferred stock, which have been designated as the
Series  A Junior  Participating Preferred  Stock,  have been
reserved   for   possible   issuance  in   connection   with
Fairfield's Rights Agreement as discussed below.  The rights
and preferences of  the remaining shares  of authorized  but
unissued   Preferred  Stock   are  to   be  established   by
Fairfield's Board of Directors at the time of issuance.

     As   of  December   31,   1995,  Fairfield   has  issued
12,325,848 shares  of Common  Stock to holders  of unsecured
resolved claims,  of which 2,395,295 were  held in treasury.
In  accordance  with   the  Plans,   Fairfield  will   issue
additional shares as the remaining claims are resolved.  The
ultimate  amount  of these  claims  and  the timing  of  the
resolution  of the claims  is largely within  the control of
the  Bankruptcy  Court.    However,  based  upon   available
information, Fairfield  presently estimates that a  total of
13,028,161  shares   of  Common   Stock   will  be   issued.
Additionally,  588,235  shares have  been reserved,  but not
issued, for the benefit of the holders of the FCI Notes (see
Note 10).  

     In  1992,  Fairfield adopted  a  Rights Agreement  which
provides for the issuance of one  right for each outstanding
share of  Fairfield's  Common  Stock.    The  rights,  which
entitle  the  holder to  purchase  from  Fairfield one  one-
hundredth of  a  share  of  Series  A  Junior  Participating
Preferred Stock at $25 per share, become exercisable (i) ten
business days  after a person becomes  the beneficial holder
of  20%  or more  of Fairfield's  Common  Stock or  (ii) ten
business days  following the  commencement  of a  tender  or
exchange offer for at least 20% of Fairfield's Common Stock.
Fairfield  may  redeem the  rights at  $.01 per  right under
certain circumstances.   The rights expire  on September  1,
2002.

     Certain of the Company's  financing arrangements contain
restrictive covenants relating to the maintenance of certain
financial ratios  and other  financial requirements.   Under
the most restrictive covenants, Fairfield is prohibited from
(i) paying dividends  or making other  distributions on  its
Common Stock  and (ii)  repurchasing  shares of  its  Common
Stock.  

                          <PAGE>
 
NOTE 9 - FAIRFIELD ACCEPTANCE CORPORATION
------   --------------------------------

     Condensed consolidated financial information  for FAC is
summarized as follows (In thousands):

<TABLE>
            CONDENSED CONSOLIDATED BALANCE SHEETS

                                    December 31,  
                                1995            1994
                                ----            ----
<S>                           <C>             <C>
ASSETS
Cash                          $    312        $    895   
Loans receivable, net          101,359         109,194   
Restricted cash                  2,957           8,120   
Due from parent                  3,187          12,115   
Other assets                     1,511           1,907 
                              --------        --------  
                              $109,326        $132,231
                              ========        ========   
LIABILITIES AND EQUITY
Financing arrangements        $ 70,073        $ 97,235   
Accrued interest and 
 other liabilities                 688             681   
Equity                          38,565          34,315 
                              --------        --------   
                              $109,326        $132,231  
                              ========        ========  
</TABLE>

<TABLE>
        CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

                               Year Ended December 31,      
                            ----------------------------  
                             1995       1994       1993
                             ----       ----       ----   
<S>                        <C>        <C>        <C>
Revenues                   $15,009    $13,644    $14,582
Expenses                     8,103      8,382      8,198
                           -------    -------    ------- 
Earnings before provision
 for income taxes            6,906      5,262      6,384
Provision for income taxes   2,656      2,015      2,444
                           -------    -------    -------  
Net earnings               $ 4,250    $ 3,247    $ 3,940
                           =======    =======    ========   
</TABLE>

      In  accordance with the  terms of  the Third Amended and
Restated  Operating  Agreement (the  "Operating Agreement"),
FAC  is  permitted  to  purchase  eligible receivables  from
Fairfield  for a  price  equal to  $.94  per $1.00  of  such
receivables.    Fairfield  is  required  by  the   Operating
Agreement to repurchase defaulted receivables from FAC at  a
price  equal to  $.94 per  $1.00 or  substitute  an eligible
receivable  on  the   basis  of  $.85  per   $1.00  of  such
receivables.     During   1995  and   1994,   FAC  purchased
receivables  from  Fairfield   with  outstanding   principal
balances of $38.1 million and $69.3 million, respectively.  

NOTE 10 - NET LIABILITIES OF ASSETS HELD FOR SALE
-------   ---------------------------------------
     At December  31, 1995,  assets held  for sale  consisted
primarily  of (i)  those assets  collateralizing the  Senior
Subordinated  Secured Notes  ("FCI Notes") and  (ii) certain
assets  purchased  in conjunction  with  the  sale of  First
Federal  Savings and  Loan  Association  of  Charlotte  (the
"Association  Assets").  Net assets  held for sale have been
recorded at the lower of the carrying amount of the asset or
fair  value, less  estimated  selling costs.   Disposals  of
these assets  have been  at sales prices  approximating book
value.

                         <PAGE>


     The  FCI Notes are  collateralized by (i) certain of the
Company's real  estate  inventories located  at  its  Pointe
Alexis  development in  Tarpon  Springs,  Florida, (ii)  the
Company's 30%  partnership interest in  Sugar Island limited
partnership in St. Croix, U. S. Virgin Islands and (iii) the
Company's  35% partnership interest in Harbour Ridge limited
partnership in Stuart, Florida.  The FCI Notes bear interest
at 10% compounded semi-annually and mature on the earlier of
(i) the  sale of all the collateral or (ii) the later of (a)
60  days after the FNBB loans have  been paid in full or (b)
March 1, 1997.  The FCI Notes are nonrecourse to the Company
and the sole sources of repayment consist of the collateral,
any  proceeds  from the  sale  of  the  collateral  and,  as
described  below, the  shares of  Common Stock  of Fairfield
reserved as additional collateral for the FCI Notes.  Due to
the illiquid nature of certain of the collateral for the FCI
Notes,  Fairfield  carries  these assets  at  a  substantial
discount  from 1991  appraised values,  which have  not been
updated and may not be indicative of current fair value.  In
the event  the  proceeds  from  the sale  of  the  remaining
collateral  securing the FCI Notes, or the fair value of any
such collateral  not sold,  are insufficient to  fully repay
the  principal  and  accrued  interest  on  the  FCI  Notes,
Fairfield will issue  shares of  its Common Stock,  up to  a
maximum  number equal  to  what a  holder  of a  $5  million
general  unsecured  claim was  entitled  to  receive on  the
effective date  of  the  plans  of  reorganization  (588,235
shares).    

      Net liabilities  of assets  held for  sale consisted  of
the following (In thousands):

<TABLE>                                                             
                                         December 31,
                                       1995        1994  
                                       ----        ----
<S>                                  <C>         <C>
Collateral for FCI Notes             $  8,423    $  8,676
Association Assets                      2,901      11,602
Other                                   1,195       2,471
                                     --------    -------- 
                                       12,519      22,749
FCI Notes                             (14,786)    (14,806)
                                     --------    -------- 
                                     $ (2,267)   $  7,943
                                     ========    ========
</TABLE>

NOTE 11 - EMPLOYEE BENEFIT PLANS
-------   ----------------------
     Profit Sharing Plan
    --------------------  
     The Company's  Profit Sharing  Plan covers substantially
all employees with one year or more of credited service, and
participants are fully vested after seven years of  credited
service.   Effective July 1,  1994, the Profit  Sharing Plan
was amended  to allow employee elective  salary deferrals as
permitted  under  Internal   Revenue  Code  Section  401(k).
Employer  discretionary contributions to  the Profit Sharing
Plan  are determined annually by  the Board of Directors and
the  amount charged  to expense  totaled $0.6  million, $0.7
million  and  $0.5   million  for  1995,   1994  and   1993,
respectively.  

     Excess Benefit Plan
    ------------------- 

     In 1994,  the Company adopted  the Excess Benefit  Plan,
which  is  a  non-qualified, unfunded  plan  established  to
provide designated employees with benefits to compensate for
certain limitations imposed by federal law  on the amount of
compensation which may be considered in determining employer
contributions to  participants'  accounts under  the  Profit
Sharing  Plan.    Participants' accounts  under  the  Excess
Benefit Plan are credited with  amounts that, except for the
limits  of  the  Internal  Revenue  Code,  would  have  been
contributed  to such participants' accounts under the Profit
Sharing  Plan.    Participants'  accounts under  the  Excess
Benefit Plan  vest in  accordance with the  vesting schedule
set  forth in the Profit Sharing Plan.  Interest is credited
to  the participants' accounts annually 

                          <PAGE>



at  the base rate of interest charged by  FNBB.  The expense
associated  with the Excess Benefit Plan totaled $0.1 million
for both 1995 and 1994.

    Retirement Plan
    ---------------
    In 1994, the Company adopted the Key Employee Retirement
Plan  (the "Retirement  Plan"),  which  is a  non-qualified,
unfunded   plan  established   to  provide   certain  senior
executives of  the Company with retirement  benefits.  Under
the  Retirement Plan, participants' accounts are credited on
each  January  1  by  a  percentage  of  each  participants'
preceding year's  total cash compensation.   In general, the
benefit  percentage can range  from 0% to  20%, depending on
the Company's three  year moving average  rate of return  on
stockholders'  equity.    Participants' accounts  are  fully
vested after seven years of  service or upon the  occurrence
of  a change  in  control  of  the  Company,  death  of  the
participant,   termination  of   employment  due   to  total
disability or retirement  on or  after the age  55, in  each
case while employed by the Company.  Interest is credited to
participants' accounts monthly at FNBB's base interest rate,
as  in effect on  the first banking  day of each  year.  The
expense  associated with  the Retirement  Plan totaled  $0.3
million for both 1995 and 1994.

     Warrant Plan
     ------------
     The Company's 1992 Warrant Plan, as amended, (the  "1992
Plan") provides for the grant of non-qualified stock warrants
to  certain key  employees and directors  to purchase  up to
1,000,000  shares of  Fairfield's  Common  Stock.   Warrants
under the  1992 Plan  are to be  granted at prices  not less
than the  fair market value  of such  shares at the  date of
grant and may be  exercisable for periods of up to  10 years
from the date of grant.  Warrants available for future grant
totaled  132,000 at December 31,  1995.  The following table
summarizes the activity under the 1992 Plan:

<TABLE>
                        Shares Under Option    Option Price Per Share    
                        -------------------    ---------------------
                          1995     1994           1995         1994     
                          ----     -----          ----         ----        
 <S>                    <C>       <C>        <C>           <C>   
 Outstanding at          
 beginning of year      818,000   800,000    $3.00 - $5.50     $3.00     
 Granted                 58,000    18,000    $5.50 - $7.13     $5.50     
 Cancelled               (8,000)     -       $3.00 - $5.50       -        
                        -------   -------    
 Outstanding at end 
  of year               868,000   818,000    $3.00 - $7.13 $3.00 - $5.50
                        =======   =======                                   
 Exercisable at end 
  of year               543,000   352,500            
                        =======   =======
</TABLE>

NOTE 12 - SUPPLEMENTAL INFORMATION
-------   ------------------------

     Other  revenues in  1995,  1994 and  1993  include  cash
distributions totaling  $1.6 million, $1.2 million  and $2.0
million,   respectively,  related   to  the   Company's  35%
partnership  interest  in  Harbour Ridge,  Ltd.,  a  limited
partnership engaged in the development of a tract of land in
St. Lucie, Florida. Cash distributions from this partnership
interest  are anticipated  to continue  at a  reduced amount
through  1996; however,  the  amounts and  timing of  future
distributions are not  under the control of the Company, but
are entirely within the control of the general partner.     

     Also included in other  revenues and other  expenses for
1995  are home sales and related cost of sales totaling $6.7
million and  $6.0 million,  respectively.   For  1994,  home
sales  and related cost  of sales  totaled $5.9  million and
$5.4  million,  respectively,  and  for  1993  totaled  $4.7
million and $4.4 million, respectively.   

     In December  1994, the  Company began  sales efforts  at
its  destination  sites  located  in  Orlando,  Florida  and
Nashville,  Tennessee.   The results  of operations  for 
1994  reflect $1.0
 
                         <PAGE>

million in  start-up expenses associated with these sites 
(included in "Other expenses" in the 1994 Consolidated
Statement of Earnings).  

     In September 1994, the  Company sold 100% of the capital
stock  of  First Federal  Savings  and  Loan Association  of
Charlotte ("First Federal") for $41.0 million and recognized
a net gain on the  sale of $5.2 million.  The  gain from the
sale  of First Federal was not subject to federal income tax
due to a  permanent tax basis difference in  First Federal's
stock and underlying goodwill.  Included in "Restricted cash
and escrow  accounts" at December  31, 1995 is  $2.9 million
representing  certain assets retained  and/or pledged to the
buyer to securitize Fairfield's  obligation to indemnify the
buyer  against   general  indemnities  and   three  existing
lawsuits/claims  which  have  been  asserted  against  First
Federal (see Note 13).   

     Interest  paid  totaled $9.3 million, $20.5 million and
$25.5 million,  for 1995, 1994  and 1993, respectively.   Of
the  amounts  for 1994  and  1993,  $9.0 million  and  $11.1
million, respectively, were related to First Federal.

     Included in other assets  at December 31,  1995 and 1994
are (i) $5.1 million at each  year end related to the assets
of the Company's  life insurance  subsidiary, (ii)  deferred
tax  assets   totaling  $5.0   million  and  $2.9   million,
respectively (see Note 7) and (iii)  unamortized capitalized
financing   costs  of   $1.5  million   and  $2.0   million,
respectively.  Included in other liabilities at December 31,
1995  and  1994  are  (i) $2.9  million  and  $2.7  million,
respectively,  related to  the liabilities of  the Company's
life insurance subsidiary  and (ii)  accruals totaling  $4.6
million  and $3.7  million,  respectively,  related  to  the
Company's employee benefit plans.

NOTE 13 - CONTINGENCIES
-------   -------------
     In  June   1992,  the   Pagosa  Lakes  Property   Owners
Association ("PLPOA")  filed an adversary proceeding  in the
Bankruptcy  Court  for  the  Eastern  District  of Arkansas,
Western   Division   (the   "Bankruptcy  Court")   asserting
equitable   ownership   or   lien   interests   in   certain
recreational amenities, including  golf courses.   In  March
1994,  the Bankruptcy  Court issued  its  decision upholding
Fairfield's ownership of the Pagosa  recreational amenities,
subject to  a restrictive covenant allowing  Pagosa property
owners and  their guests to use  the recreational amenities.
The  United  States  District  Court,  Eastern  District  of
Arkansas, Western Division  ("District Court") affirmed  the
Bankruptcy  Court's order  in its  entirety, by  order dated
September 25, 1995.  The PLPOA has filed a  notice of appeal
to  the  United  States  Court  of Appeals  for  the  Eighth
Circuit.  Fairfield's ability to dispose of the recreational
amenities at Pagosa is restricted until the claim is finally
resolved.

     In  August  1992,  the  PLPOA filed  an  appeal  to  the
District  Court  of  the  Bankruptcy  Court's  final   order
confirming Fairfield's  plan of  reorganization.   The basis
for  the  appeal was  the  PLPOA's  position that  Fairfield
should  have   been  required  to  resolicit   the  plan  of
reorganization due  to its amendment in  accordance with the
Bankruptcy   Court's   conditional  confirmation   order  to
eliminate    any    recovery   for    Fairfield's   previous
stockholders.  The Bankruptcy Court rejected this  argument,
finding  that the  property owner  group lacked  standing to
raise this  issue and the  District Court,  on November  16,
1995, affirmed  the Bankruptcy Court's decision.   The PLPOA
has not appealed the District Court's decision.

     In July  1993  and  September  1993, two  lawsuits  (the
"Recreation Fee Litigation")  were filed  by 29  individuals
and a  company against  Fairfield in the  District Court  of
Archuleta County, Colorado.  The Recreation  Fee Litigation,
which  seeks certification  as class  actions, alleges  that
Fairfield  and  its  predecessors  in   interest  wrongfully
imposed  an  annual  recreation  fee  on  owners  of   lots,
condominiums, 

                      <PAGE>


townhouses, VOIs  and single family residences
in Fairfield's Pagosa, Colorado development.  The amount  of
the recreation fee,  which was  adopted in  August 1983,  is
$180  per  lot,  condominium,  townhouse  and single  family
residence subject to  the fee  and $360 per  unit for  VOIs.
The  Recreation  Fee  Litigation  in  general  seeks  (a)  a
declaratory judgment that the recreation fee is invalid; (b)
the refund, with interest, of the recreation fees which were
allegedly  improperly  collected by  Fairfield;  (c) damages
arising  from  Fairfield's  allegedly improper  attempts  to
collect the recreation fee (i) in an amount of not less than
$1,000 per lot in one case and (ii) in an unstated amount in
the other  case; (d) punitive  damages; and (e)  recovery of
costs and  expenses, including  attorneys' fees.   The court
has  not  yet ruled  on whether  or  not the  Recreation Fee
Litigation  will be  allowed  to proceed  as class  actions.
Because  of the  preliminary  nature of  the litigation  and
uncertainty concerning the time period covered by the suits'
allegations,  Fairfield is  unable  to  determine  with  any
certainty  the  dollar  amount  sought  by  plaintiffs,  but
believes it to be material.

     In   November  1993,   Fairfield  filed   an   adversary
proceeding  in  the  Bankruptcy  Court,  alleging  that  the
Recreation Fee Litigation violates  the discharge granted to
Fairfield in  its Chapter 11  bankruptcy reorganization  and
the  injunction  issued  by  the  Bankruptcy  Court  against
prosecution of  any  claims  discharged  in  the  bankruptcy
proceedings.   By  orders and  opinions dated  September 29,
1994, the  Bankruptcy Court  decided  motions filed  by  the
plaintiffs in the Recreation Fee Litigation, in response  to
Fairfield's  adversary  proceeding.   The  Bankruptcy  Court
retained jurisdiction over  one of the  lawsuits (the  Storm
lawsuit) and determined  that any purchaser  of a lot  from
Fairfield and  its predecessors  prior  to August  14,  1992
would be limited to a pre-confirmation cause of action.  The
Bankruptcy   Court   determined   that  it   did   not  have
jurisdiction over the second lawsuit (the  Daleske lawsuit),
involving eight individuals  and one company,  due to  prior
proceedings in the case in Colorado federal district  court,
which ruled  that the plaintiffs  in this lawsuit  had post-
confirmation  causes of action, although all nine plaintiffs
are believed to  have purchased their  lots prior to  August
14,  1992.   Fairfield has  appealed the  Bankruptcy Court's
decision in the Daleske lawsuit,  and the plaintiffs in  the
Storm lawsuit have appealed  the Bankruptcy Court's decision
in  that case,  to the  District Court, which  has scheduled
oral arguments on  these appeals  for April 22,  1996.   The
Colorado State  Court  stayed  further  proceedings  in  the
Recreation Fee Litigation pending the outcome of the appeals
to the District Court.  Two additional related lawsuits have
also been  filed in  the  Archuleta County  District  Court,
raising similar issues and demands  as the Storm and Daleske
cases.  The Fiedler  case, filed in October 1994,  was filed
individually,  while  the second  of  these  new cases,  the
Lobdell  case, was  filed in  November 1994, as  a proported
class  action.    In  February  1995,  Fairfield  filed   an
adversary  proceeding in  the Bankruptcy  Court  against the
Fiedler  and the Lobdell  plaintiffs, seeking relief similar
to  that  requested  in  the  Storm  and  Daleske  adversary
proceeding.     The  Colorado  District   Court  has  stayed
proceedings in  the Lobdell  case.   The  Colorado  District
Court  entered  summary judgment  against  Fairfield in  the
Fiedler case, holding that the individual lot in question is
not subject to the  recreation fee, based upon facts  unique
to the  Fiedler case.   Fairfield  has appealed  the summary
judgment decision in the Fiedler case.  The Bankruptcy Court
has determined,  by decision dated September  18, 1995, that
it  does not have jurisdiction in the Fiedler case, but also
determined  that it  does have  jurisdiction in  the Lobdell
case,  based upon similar reasoning to the Storm case.  Both
the  Fiedler and the Lobdell cases have been appealed to the
District Court.

     Fairfield intends  to defend  vigorously the  Recreation
Fee  Litigation, and  the two  related cases,  including any
attempt to certify a class in any of these cases.  Fairfield
has previously implemented recreation fee charges at certain
other  of  its resort  sites which  are  not subject  to the
pending action.

                          <PAGE>

 
     In  December 1993,  Charlotte  T.  Curry, who,  with her
husband, purchased a lot from Fairfield under an installment
sale contract subsequently sold to First Federal, filed suit
against  First Federal, currently  pending in Superior Court
in Mecklenburg  County, North  Carolina, alleging  breach of
contract,  breach   of  fiduciary  duty   and  unfair  trade
practices.  In  April 1994, the  complaint was amended,  (a)
adding Fairfield as a party,  (b) adding an additional count
against both Fairfield and First  Federal alleging violation
of  the North  Carolina's Racketeer  Influenced  and Corrupt
Organizations  ("RICO")  Statute  and  (c)  adding  a  count
against  Fairfield alleging  fraud.   The litigation,  which
seeks  class action  certification,  contests the  method by
which Fairfield calculated refunds  for lot purchasers whose
installment sale contracts were cancelled due to failure  to
complete payment of  the deferred sales  price for the  lot.
Most  installment lot  sale contracts  require  Fairfield to
refund  to  a  defaulting  purchaser  the  amount  paid   in
principal,  after deducting  the greater of  (a) 15%  of the
purchase price of the lot or (b) Fairfield's actual damages.
The plaintiff  disputes  Fairfield's method  of  calculating
damages,  which has  historically  included  certain  sales,
marketing  and other expenses.   In the case  of Ms. Curry's
lot,  the amount of refund claimed as having been improperly
retained is  approximately $3,600.  The  Curry lawsuit seeks
damages,  punitive  damages,   treble  damages  under  North
Carolina   law  for   unfair   trade  practices   and  RICO,
prejudgment interest  and attorney's  fees  and costs.    By
order dated  July 6, 1994,  the court dismissed  Ms. Curry's
claims for (a)  breach of  contract, due to  the statute  of
limitations, (b) breach of  fiduciary duty, due to  the lack
of  a fiduciary  duty  and the  statute of  limitations, (c)
fraud,  due to the statute of limitations, and (d) RICO, due
to failure  to state  a claim.   The  court, by  order dated
August 16, 1994, dismissed Ms. Curry's only remaining  claim
against  Fairfield, for  unfair trade practices,  subject to
possible appeal rights.  By order filed September 15,  1995,
the   court  denied   the  plaintiff's   motion   for  class
certification.  The plaintiff has appealed the denial of the
motion for class certification, but no decision has yet been
rendered on the appeal.

      Under the  Stock  Purchase  Agreement  for the  sale  of
First  Federal, Fairfield  agreed  to  indemnify  the  buyer
against any  liability  in  the  Curry  litigation.    While
Fairfield  is no longer  a defendant  in the  litigation, it
intends to  coordinate the defense of this  lawsuit with the
counsel who have been representing First Federal, to  defend
the   Curry  litigation  vigorously.    Fairfield  also  has
cancelled defaulted lot installment sales contracts owned by
it and its  subsidiaries (other than  First Federal),  using
the same method of calculating refunds as is at issue in the
Curry litigation.

NOTE 14 - FAIR VALUE OF FINANCIAL INSTRUMENTS
-------   -----------------------------------

     The fair value  estimates presented herein are based  on
relevant  market  information.     As  these  estimates  are
subjective  in   nature   and  involve   uncertainties   and
significant judgment, they are not necessarily indicative of
the  amount that  the  Company could  realize  on a  current
market exchange.   The fair value  disclosures for financial
instruments are as follows:

     Cash and  cash equivalents:   The carrying  amounts
     reported   in   the  consolidated   balance  sheets
     approximate their fair values  at December 31, 1995
     and 1994.

     Restricted cash and escrow accounts:  The estimated
     fair values of restricted  cash and escrow accounts
     approximate their carrying amounts at  December 31,
     1995 and 1994.

     Loans receivable:   The  carrying amounts  of loans
     receivable are a reasonable estimate of their  fair
     values  at  December 31,  1995  and  1994 based  on
     valuation models using risk adjusted interest rates
     and historical prepayment experiences.

                           <PAGE>

     Financing arrangements:    The carrying  amounts of  the
     Company's   borrowings  with   variable  interest  rates
     approximated their fair values  at December 31, 1995 and
     1994.       The   carrying  amounts   of  the  Company's
     borrowings  with  fixed  interest  rates  totaled  $56.8
     million and  $84.3  million  at  December 31,  1995  and
     1994,   respectively.     The  fair   values   of  these
     borrowings totaled  $56.4 million  and $80.2 million  at
     December  31,  1995 and  1994,  respectively,  and  were
     estimated using discounted  cash flow analyses  based on
     the Company's current borrowing rates for similar  types
     of borrowing arrangements.

<TABLE>
NOTE 15 - UNAUDITED CONSOLIDATED QUARTERLY FINANCIAL DATA 
-------   ------------------------------------------------
Dollars in thousands, except per share data

                             Year Ended December 31, 1995   
                           ---------------------------------
                           First   Second    Third   Fourth 
                          Quarter  Quarter  Quarter  Quarter
                          -------  -------  -------  -------
<S>                       <C>      <C>      <C>      <C>
Total revenues            $24,559  $37,789  $42,949  $36,854
Total expenses             24,314   33,544   37,700   33,555
                          -------  -------  -------  -------
Earnings before provision 
 for income taxes             245    4,245    5,249    3,299
Provision for income taxes     93    1,613    1,995    1,308
                          -------  -------  -------  -------
Net earnings             $   152  $ 2,632  $ 3,254   $ 1,991
                         =======  =======  =======   =======

Net earnings per share:                                     
Primary                     $.01     $.24     $.29      $.18
                            ====     ====     ====      ====
Fully diluted               $.01     $.23     $.28      $.17
                            ====     ====     ====      ====
</TABLE>
<TABLE>
                             Year Ended December 31, 1994   
                          ----------------------------------
                          First    Second   Third    Fourth 
                         Quarter   Quarter Quarter   Quarter
                         -------   ------- -------   -------
<S>                      <C>       <C>     <C>       <C>
Total revenues           $18,607   $29,518 $37,512   $26,117
Total expenses            17,067    25,698  28,714    25,128
                         -------   ------- -------   -------
Earnings before provision 
 for income taxes          1,540     3,820   8,798       989
Provision for income taxes   462     1,146   1,079       191
                         -------   ------- -------   -------
Net earnings             $ 1,078   $ 2,674 $ 7,719   $   798
                         =======   ======= =======   =======
Net earnings per share:                                   
  Primary                   $.10      $.24    $.70      $.07
                            ====      ====    ====      ====
  Fully diluted             $.09      $.23    $.66      $.07
                            ====      ====    ====      ====
</TABLE>

Revenues  in the third quarter of 1994 include a non-taxable
gain of $5.2 million  related to the sale of  First Federal.
Certain amounts in the  consolidated financial statements of
prior quarters for 1995 and  1994 have been reclassified  to
conform to the 1995 fourth quarter presentation.


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