<PAGE>


                          SECURITIES AND EXCHANGE COMMISSION
                              Washington, D.C. 20549


                                     FORM 10-Q


     [X]        QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934
                  (For the Quarterly Period ended September 30, 1996)

                                       OR

     [ ]     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                      SECURITIES EXCHANGE ACT OF 1934
         For transition period from ________________to_______________

                    Commission File Number:  0-24286


                               EAGLE FINANCE CORP.          
             -----------------------------------------------------
             (Exact name of Registrant as specified in its charter)


            DELAWARE                                     36-2464365  
-------------------------------             -----------------------------------
(State or other jurisdiction of             (IRS Employer Identification Number)
incorporation or organization)

1425 TRI-STATE PARKWAY, GURNEE, ILLINOIS                             60031-4060
----------------------------------------                             ----------
(Address of principal executive offices)                             (Zip Code)

                                  (847) 855-7150                    
              ----------------------------------------------------
              (Registrant's telephone number, including area code)



     Indicate by check mark whether the Registrant (1) has filed all reports 
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 
1934 during the preceding 12 months (or for such shorter period that the 
Registrant was required to file such reports), and (2) has been subject to 
such filing requirements for the past 90 days.   Yes X     No __ 

     Indicate the number of shares outstanding of each of the Issuer's 
classes of common stock as of the latest practicable date:

10,000,000 shares of common stock, $0.01 par value per share, were authorized 
and 4,189,100 shares were issued and outstanding as of September 30, 1996.


<PAGE>


                                 EAGLE FINANCE CORP.

                                    FORM 10-Q

                              ________________________

                                 TABLE OF CONTENTS
                              ________________________

                                                                      PAGE  
                                                                     NUMBER   
                                                                     ------

                           PART I.  FINANCIAL INFORMATION

Item 1.   FINANCIAL STATEMENTS

     Balance Sheets                                                     3

     Statements of Income                                               4

     Statements of Changes in Stockholders' Equity                      5

     Statements of Cash Flows                                           6

     Notes to Financial Statements                                      7

Item 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF
          FINANCIAL CONDITION AND RESULTS OF OPERATIONS                 8

                         PART II.  OTHER INFORMATION

Item 1.   LEGAL PROCEEDINGS                                            20

Item 2.   CHANGES IN SECURITIES                                        21

Item 3.   DEFAULTS UPON SENIOR SECURITIES                              21

Item 4.   SUBMISSION OF MATTERS TO A VOTE OF
          SECURITY HOLDERS                                             21

Item 5.   OTHER INFORMATION                                            22

Item 6.   EXHIBITS AND REPORTS ON FORM 8-K                             22

SIGNATURES                                                            S-1




                                       2

<PAGE>

                               EAGLE FINANCE CORP.

                                 BALANCE SHEETS
             AS OF SEPTEMBER 30, 1996 AND 1995 AND DECEMBER 31, 1995
                                   (Unaudited)

                                     ASSETS

<TABLE>
<CAPTION>
                                                               SEPTEMBER 30,
                                                     -------------------------------   DECEMBER 31,
                                                           1996            1995           1995
                                                     --------------   --------------   ------------
<S>                                                  <C>              <C>              <C>
Finance receivables, net                             $  122,867,562   $  136,601,761   $145,718,866
Nonrefundable acquisition discount                       (3,789,744)     (15,571,155)    (9,428,152)
Allowance for credit losses                              (7,949,865)      (1,258,679)   (10,807,835)
                                                     --------------   --------------   ------------
                                                        106,261,969      119,771,927    125,482,879
Cash                                                      2,198,112        2,022,286      2,069,217
Money market investments                                    545,509          545,000        545,000
Prepaid expenses and debt issuance costs                  1,875,702        1,322,674      1,142,925
Repossessed or titled assets                              5,388,343        1,786,201      4,429,140
Deferred income tax                                       4,865,984          359,042      4,136,270
Other assets                                                543,200          413,959      1,253,046
                                                     --------------   --------------   ------------
                                                     $  121,678,819   $  126,221,089   $139,058,477
                                                     --------------   --------------   ------------
                                                     --------------   --------------   ------------

                          LIABILITIES AND STOCKHOLDERS' EQUITY

Senior debt                                          $   84,491,239   $   83,153,306   $100,651,557
Subordinated debt                                        18,006,905       18,029,979     18,045,298
Accrued interest                                            160,967          324,815        502,834
Accrued income tax                                               --          108,670        683,144
Accounts payable and accrued liabilities                  2,636,405        5,045,595      3,180,328
Unearned insurance commissions                               23,884           53,734         46,115
Dealer reserves                                             278,505          199,236        292,864
                                                     --------------   --------------   ------------
Total liabilities                                       105,597,905      106,915,335    123,402,140
Stockholders' equity:
Preferred Stock, authorized 3,000,000 shares;
   none issued                                                   --               --             --
Common Stock:  $.01 par value, authorized 10,000,000
   shares, issued and outstanding 4,189,100 shares           41,891           41,891         41,891
Additional paid-in capital                               13,514,422       13,506,187     13,514,422
Retained earnings                                         2,524,601        5,757,676      2,100,024
                                                     --------------   --------------   ------------
Total stockholders' equity                               16,080,914       19,305,754     15,656,337
                                                     --------------   --------------   ------------
                                                     $  121,678,819   $  126,221,089   $139,058,477
                                                     --------------   --------------   ------------
                                                     --------------   --------------   ------------
</TABLE>

                        See accompanying notes to financial statements.


                                              3

<PAGE>


                                      EAGLE FINANCE CORP.

                                      STATEMENTS OF INCOME
                     THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
                                         (Unaudited)

<TABLE>
<CAPTION>
                                       THREE MONTHS ENDED SEPTEMBER 30,   NINE MONTHS ENDED SEPTEMBER 30,
                                       --------------------------------   -------------------------------
                                              1996           1995              1996            1995
                                       ---------------   --------------   -------------   ---------------
<S>                                       <C>            <C>              <C>             <C>
Interest income:
   Interest and fee income                $  6,949,015   $  7,166,985     $  22,308,922   $  17,908,118
   Interest expense                         (2,406,059)    (2,333,322)       (7,278,781)     (5,564,213)
                                          ------------   ------------     -------------   -------------
Net interest income                          4,542,956      4,833,663        15,030,141      12,343,905
Provision for credit losses                 (1,730,000)            --        (6,626,000)         52,890
                                          ------------   ------------     -------------   -------------
Net interest income after provision
   for credit losses                         2,812,956      4,833,663         8,404,141      12,396,795
Other income:
   Servicing income                          1,758,189        308,519         4,111,599       1,666,678
   Insurance commissions                         8,530         62,809            43,615         229,834
                                          ------------   ------------     -------------   -------------
Total other income                           1,766,719        371,328         4,155,214       1,896,512
Income before operating expenses             4,579,675      5,204,991        12,559,355      14,293,307

Operating expenses:
   Salaries and related costs                2,033,544      1,545,140         5,915,906       4,115,388
   Other operating expenses                  2,198,669      1,306,940         6,006,450       3,643,056
                                          ------------   ------------     -------------   -------------
Total operating expenses                     4,232,213      2,852,080        11,922,356       7,758,444
                                          ------------   ------------     -------------   -------------
Income before income taxes                     347,462      2,352,911           636,999       6,534,863
Applicable income taxes                        133,439        924,346           212,423       2,551,766
                                          ------------   ------------     -------------   -------------
Net income                                  $  214,023   $  1,428,565        $  424,576    $  3,983,097
                                          ------------   ------------     -------------   -------------
                                          ------------   ------------     -------------   -------------
Per share data:
   Net income per common share
      (primary)                                  $0.05          $0.34             $0.10           $0.95
                                                 -----          -----             -----           -----
                                                 -----          -----             -----           -----
   Net income per common share
      (fully diluted)                            $0.05          $0.33             $0.09           $0.91
                                                 -----          -----             -----           -----
                                                 -----          -----             -----           -----
   Average number of common shares
     outstanding (primary)                   4,189,100      4,202,000         4,189,100       4,182,000
                                          ------------   ------------     -------------   -------------
                                          ------------   ------------     -------------   -------------
   Average number of common shares
     outstanding (fully diluted)             4,189,100      4,391,000         4,195,809       4,358,000
                                          ------------   ------------     -------------   -------------
                                          ------------   ------------     -------------   -------------
</TABLE>


                     See accompanying notes to financial statements.

                                            4


<PAGE>

                                  EAGLE FINANCE CORP.

                      STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                 THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
                                     (Unaudited)

<TABLE>
<CAPTION>
                                         THREE MONTHS ENDED SEPTEMBER 30,   NINE MONTHS ENDED SEPTEMBER 30,
                                         --------------------------------   -------------------------------
                                                1996           1995              1996            1995
                                         ---------------   --------------   -------------   ---------------
<S>                                         <C>            <C>              <C>             <C>
Common stock:
   Balance at beginning of period            $  41,891       $  41,800       $  41,891        $  41,800
   Stock options exercised                          --              91              --               91
                                           -----------     -----------     -----------      -----------
                                                41,891          41,891          41,891           41,891
                                           -----------     -----------     -----------      -----------
Additional paid-in capital:
   Balance at beginning and end of period   13,514,422      13,506,187      13,514,422       13,506,187

Retained earnings:
   Balance at beginning of period            2,310,578       4,329,111       2,100,024        1,774,579
   Net income                                  214,023       1,428,565         424,577        3,983,097
                                           -----------     -----------     -----------      -----------
                                             2,524,601       5,757,676       2,524,601        5,757,676
                                           -----------     -----------     -----------      -----------
Total stockholders' equity                 $16,080,914     $19,305,754     $16,080,914      $19,305,754
                                           -----------     -----------     -----------      -----------
                                           -----------     -----------     -----------      -----------
</TABLE>








                          See accompanying notes to financial statements.

                                                 5

<PAGE>
                                        EAGLE FINANCE CORP.

                                      STATEMENTS OF CASH FLOWS
                      THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
                                           (Unaudited)
<TABLE>
<CAPTION>
                                                     THREE MONTHS ENDED SEPTEMBER 30,   NINE MONTHS ENDED SEPTEMBER 30,
                                                     --------------------------------   -------------------------------
                                                            1996           1995              1996            1995
                                                     ---------------   --------------   -------------   ---------------
<S>                                                  <C>               <C>              <C>             <C>
Cash flows from operating activities:
   Net income                                           $  214,022      $  1,428,565      $  424,576     $  3,983,097
   Adjustments to reconcile net income to 
      net cash provided by (used in) 
      operating activities:

   Provision for credit losses                           1,730,000                --       6,626,000          (52,890)
   Net finance receivable (charge-offs) 
      recoveries against allowance                      (2,672,558)           15,917      (9,483,970)          62,769
   Decrease (increase) in:
      Prepaid expenses                                    (484,003)         (346,000)       (311,265)        (268,195)
      Repossessed or titled assets                        (626,362)         (428,607)       (959,203)      (1,119,776)
      Other assets                                         738,948           643,820         709,846         (113,975)
   Deferred tax                                            772,071                --              --               --
   Increase (decrease) in:
      Accrued interest                                    (206,386)           21,272        (341,867)         205,386
      Accrued income tax                                  (729,714)          108,670      (1,412,858)              --
      Accounts payable and accrued liabilities            (350,539)          793,412        (543,921)       1,943,356
      Unearned insurance commissions                        (6,368)          (44,864)        (22,231)         (50,163)
      Dealer reserves                                      (12,196)          126,325         (34,359)         125,308
      Nonrefundable acquisition discount                (1,568,695)          (77,972)     (5,618,408)       6,900,035
                                                      ------------      ------------    ------------     ------------
Net cash provided by (used in) operating 
   activities                                           (3,201,780)        2,240,538     (10,967,660)      11,614,952
                                                      ------------      ------------    ------------     ------------
Cash flows from investing activities:
   Investments                                               8,646          (545,000)           (509)        (545,000)
   Proceeds from bulk sale of vehicle retail 
      installment notes                                  9,463,170        22,775,013      43,745,444       39,975,324
   Principal collected on finance receivables           10,728,904        16,395,790      37,868,774       41,532,708
   Finance receivables originated or 
      acquired, net of write-offs                      (18,719,680)      (47,844,111)    (53,896,930)    (139,245,750)
                                                      ------------      ------------    ------------     ------------
Net cash provided by (used in) investing 
   activities                                            1,481,040        (9,218,308)     27,716,779      (58,282,718)
                                                      ------------      ------------    ------------     ------------
Cash flows from financing activities:
   Proceeds from draws on bank lines                    12,170,000        92,425,013      41,450,583      424,754,545
   Repayments of borrowings                             (9,601,631)      (85,675,013)    (58,082,214)    (393,744,545)
   Proceeds from issuance of other debt                     36,791            88,801          92,519       17,137,702
   Repayment of other debt                                      --           (54,587)       (130,913)        (400,330)
   Debt issuance cost                                     (360,954)          107,273        (421,512)        (934,040)
   Debt issued to an affiliate                              20,195           688,588         471,313          907,494
   Dividends paid                                               --                --              --               --
   Deferred tax credit to additional paid-in capital            --                --              --               --
   Stock Options Exercised                                      --            81,900              --           81,900
   Tax benefit from stock options exercised                     --            31,941              --           31,941
                                                      ------------      ------------    ------------     ------------
Net cash provided by (used in) financing 
     activities                                          2,264,401         7,693,916     (16,620,224)      47,834,667
                                                      ------------      ------------    ------------     ------------
Cash, net change                                           543,661           716,146         128,895        1,166,901
Cash at beginning of period                              1,654,451         1,306,140       2,069,217          855,385
                                                      ------------      ------------    ------------     ------------
Cash at end of period                                 $  2,198,112      $  2,022,286    $  2,198,112     $  2,022,286
                                                      ------------      ------------    ------------     ------------
                                                      ------------      ------------    ------------     ------------
Supplemental cash flow disclosures - cash paid 
   during the period for:
   Interest                                           $  1,921,067      $  2,270,266    $  5,852,823     $  5,317,034
   Income taxes and Illinois replacement tax             $  91,082      $    850,991    $  1,625,282     $  2,651,584
</TABLE>
                                 See accompanying notes to financial statements.

                                                         6


<PAGE>

                               EAGLE FINANCE CORP.

                          NOTES TO FINANCIAL STATEMENTS 


1.   The financial statements of Eagle Finance Corp., a Delaware corporation 
(the "Company"), are unaudited, but in the opinion of management reflect all 
necessary adjustments, consisting only of normal recurring accruals, for a 
fair presentation of results as of the dates and for the periods covered by 
the financial statements. The results for the interim periods are not 
necessarily indicative of the results of operations that may be expected for 
the fiscal year.  Management suggests that the unaudited interim financial 
statements contained herein be read in conjunction with the financial 
statements and the accompanying notes to the financial statements included in 
the Company's 1995 Annual Report on Form 10-K, as amended.

2.   Net income per common share amounts are based on the weighted average 
number of common shares and common stock equivalents outstanding as reflected 
on Exhibit 11 to this Quarterly Report on Form 10-Q.






                                        7

<PAGE>


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

     The Company is a specialized financial services company engaged 
primarily in acquiring and servicing automobile retail installment sales 
contracts ("Installment Contracts") for purchases of late model used 
automobiles by "non-prime" consumers, who typically have limited access to 
traditional sources of consumer credit.  To a lesser extent, the Company also 
makes direct consumer loans and finance leases and purchases other retail 
installment sale contracts (collectively "Other Loans") and offers, as agent, 
insurance and other products related to consumer finance transactions 
(collectively "Insurance Products"). The Company maintains its corporate 
headquarters and a regional office near Chicago in Gurnee, Illinois, and 
operates two other regional offices in Tampa and Orlando, Florida.

     As of September 30, 1996, the Company had active relationships (I.E., 
the Company purchased Installment Contracts from such dealers during the 
preceding 90 days) with approximately 450 dealers located primarily in 
Illinois, Florida, Georgia and South Carolina, and, to a lesser extent, in 
Arizona, Colorado, Indiana, Kentucky, New Mexico, Ohio, Tennessee, Texas, 
Utah, Wisconsin and Wyoming.

     The following is management's discussion and analysis of the financial 
condition of the Company at September 30, 1996 (unaudited) as compared to 
September 30, 1995 (unaudited) and December 31, 1995, and the results of 
operations for the three and nine months ended September 30, 1996 and 1995 
(unaudited).  This discussion should be read in conjunction with the 
Company's financial statements and notes thereto appearing elsewhere in this 
quarterly report. Data for the three and nine months ended September 30, 1996 
are not necessarily indicative of results expected for the full fiscal year.  
The ratios and percentages provided below are calculated using the detailed 
financial information contained in the Company's financial statements and the 
financial data included elsewhere in this Form 10-Q.  References to "net" 
finance receivables or Installment Contracts shall mean finance receivables 
or Installment Contracts, as appropriate, net of unearned finance charges. 

RECENT DEVELOPMENTS

     On September 27, 1996, the Company sold approximately $9.4 million (net) 
of Texas-originated Installment Contracts to Search Capital Group, Inc. 
("Search Capital").  This Installment Contract sale reflects the Company's 
deemphasis of its Texas operations.

     On September 27, 1996, the Company renegotiated the terms of its 
revolving credit facility provided by a group of nine commercial banks 
pursuant to an amended and restated Revolving Credit Agreement (as amended 
and restated, the "Revolving Credit Agreement").  The Revolving Credit 
Agreement was extended through June 30, 1997.  SEE "Liquidity and Capital 
Resources."

     On October 18, 1996, the Company sold approximately $17.0 million (net) 
of Installment Contracts to General Electric Capital Corporation ("GECC") 
under an Asset Purchase Agreement dated as of June 25, 1996, between the 
Company and GECC (the "GECC Agreement").  As of 


                                       8

<PAGE>

September 30, 1996, the Company serviced approximately $46.7 million (net) of 
Installment Contracts sold to GECC pursuant to an Amended and Restated 
Servicing Agreement dated as of June 25, 1996 between the Company and GECC.  
SEE "Liquidity and Capital Resources."

     On October 25, 1996, the Company completed the securitization of 
approximately $35.2 million (net) of Installment Contracts through a 
transaction agented by Greenwich Capital Markets, Inc. ("Greenwich").  The 
transaction was structured to create three classes of certificates, which 
were rated by Duff & Phelps and Fitch.  Greenwich, the placement agent, has 
sold all three classes of certificates.

GENERAL

     Installment Contracts represented approximately 99.3% of the Company's 
net finance receivables at September 30, 1996.  Installment Contracts are 
purchased on a non-recourse basis from automobile dealers and are typically 
secured by medium-priced used automobiles.  The automobiles are purchased by 
non-prime consumers at retail prices typically ranging from approximately 
$6,000 to $15,000.  Installment Contracts financing such purchases typically 
have annual percentage rates of interest ("APRs") ranging from 14% to 28% and 
repayment terms ranging from 12 to 60 months.  The average original principal 
amount financed under Installment Contracts outstanding at September 30, 1996 
was approximately $8,400, at an average APR of approximately 27.3%, with an 
average original term of approximately 40 months.  The Company's experience 
has shown, however, that the average life of the Company's Installment 
Contracts is substantially less than 40 months due to the amount of payoffs 
and repossessions that occur prior to contract maturity.

     The Company's portfolio of managed (owned or serviced) finance 
receivables, net of unearned finance charges, declined to $164.7 million at 
September 30, 1996 from $184.9 million at December 31, 1995 and from $186.3 
million at September 30, 1995.  The Company's income before income taxes 
declined to $425,000 for the nine months ended September 30, 1996 from $4.0 
million for the nine months ended September 30, 1995.  SEE "Accounting 
Matters."

     Interest and servicing income on managed Installment Contracts accounts 
for most of the Company's revenue.  The net amount of Installment Contracts 
purchased declined to $87.1 million during the nine months ended September 
30, 1996 from $151.5 million during the nine months ended September 30, 1995. 
As reflected in the following table, the finance receivables (purchased or 
originated) by the Company during the periods presented below consist 
primarily of Installment Contracts. 







                                        9

<PAGE>

<TABLE>
<CAPTION>

                                     FOR THE THREE MONTHS                   FOR THE NINE MONTHS 
                                       ENDED SEPTEMBER 30,                   ENDED SEPTEMBER 30,
                                ---------------------------------    ------------------------------------
                                     1996              1995                1996                 1995
                                ----------------  ---------------    ----------------     ---------------
                                           % OF             % OF                % OF                % OF
                                AMOUNT    TOTAL   AMOUNT    TOTAL    AMOUNT     TOTAL     AMOUNT    TOTAL
                                -------  -------  -------  ------    -------   ------     -------  -------
                                                       (DOLLARS IN THOUSANDS)
<S>                             <C>      <C>      <C>      <C>       <C>       <C>        <C>       <C>
Net Installment 
  Contracts
  purchased (1)                $29,654    99.6%   $54,848    99.7%   $87,131     99.6%   $151,546    99.8%
Net Other 
  Loans originated (1)             210     0.4%       145     0.3%       385      0.4%        335     0.2%
                                -------  -------  -------  ------    -------   ------     -------  -------
Total                          $29,864   100.0%   $54,993   100.0%   $87,516    100.0%   $151,881   100.0%
                               =======   ======   =======  ======    =======    ======   ========   ======
</TABLE>

___________________
(1) Net of unearned finance charges

     As part of its funding strategy, the Company sold $34.3 million (net) of 
Installment Contracts to GECC during the nine-month period ended September 
30, 1996. No gains or losses were recorded at the time the Installment 
Contracts were sold, and the Company did not capitalize any servicing fees in 
connection with the sales.  The Company retained servicing rights on the 
Installment Contracts sold.  The Company recognizes servicing income over the 
life of the related receivables as a percentage of receivables outstanding.  
The Company is also eligible to receive bonus servicing fees based on 
portfolio performance. Bonus servicing fees are recognized as income when 
earned.  For prospective sales and securitizations of Installment Contracts, 
including the securitization transaction that was completed during October, 
1996, the Company presently intends to record a gain or loss on such sales in 
a manner consistent with industry practice.  The net amount of Installment 
Contracts serviced by the Company for third parties was $46.7 million and 
$49.7 million at September 30, 1996 and 1995, respectively.

ACCOUNTING MATTERS

     Historically, the Company recorded, at the time it purchased Installment 
Contracts, a portion of contract interest (which would otherwise have been 
recorded as unearned finance charges) as nonrefundable acquisition discount 
when the credit risk and potential for future losses warranted such an 
allocation. For the three- and nine-month periods ended September 30, 1996, 
however, the Company did not allocate any portion of contract interest from 
Installment Contracts purchased during the period to nonrefundable 
acquisition discount. Instead, the Company established reserves for credit 
losses on its portfolio of Installment Contracts through the recognition of a 
provision for credit losses that supplemented the balance of nonrefundable 
acquisition discount.  SEE "Credit Loss Experience."












                                      10

<PAGE>

PROFITABILITY


     The following table sets forth certain data relating to the Company's 
net income for the three and nine months ended September 30, 1996 and 1995 
and for the year ended December 31, 1995:

<TABLE>
<CAPTION>
                                        FOR THE THREE MONTHS     FOR THE NINE MONTHS
                                         ENDED SEPTEMBER 30,     ENDED SEPTEMBER 30,
                                        --------------------    ---------------------
                                                                                         FOR THE YEAR ENDED
                                          1996         1995        1996        1995      DECEMBER 31, 1995
                                        --------     --------   ---------    --------    ------------------
                                                                 (DOLLARS IN THOUSANDS)
<S>                                     <C>          <C>         <C>         <C>          <C>
Average net finance
 receivables (1)                        $121,806     $138,808    $132,576    $113,002         $120,830
Average interest bearing 
 liabilities                             103,865      102,539     110,441      80,548           88,276
 Total interest and fee income             6,949        7,167      22,309      17,908           27,100
 Total interest expense                    2,406        2,333       7,279       5,564            8,093
                                        --------     --------   ---------    --------         --------
Net interest income before
     provision for credit losses        $  4,543     $  4,834   $  15,030    $ 12,344         $ 19,007
                                        ========     ========   =========    ========         ========
Average interest rate earned on 
  net finance receivables (2)              22.82%       20.65%      22.44%      21.13%           22.43%
Average interest rate on interest
 bearing liabilities                        9.27%        9.10%       8.79%       9.21%            9.17%
                                        --------     --------   ---------    --------         --------
 Net interest spread                       13.55%       11.55%      13.65%      11.92%           13.26%
                                        ========     ========   =========    ========         ========
 Net interest margin (3)                   14.92%       13.93%      15.12%      14.56%           15.73%
                                        ========     ========   =========    ========         ========
</TABLE>
_____________________________
(1)  Excludes average net finance receivables serviced for third parties of
     $51.5 million and $34.0 million for the three months ended September 30,
     1996 and 1995, respectively; and $45.0 million and $30.2 million for the
     nine months ended September 30, 1996 and 1995, respectively.  Average net
     finance receivables serviced for third parties were $33.1 million for the
     year ended December 31, 1995.

(2)  Average interest rates earned typically are less than average APRs charged
     to consumers due to the Company's historical policy of allocating to
     nonrefundable acquisition discount, at the time Installment Contracts are
     purchased, a portion of contract interest (which would otherwise have been
     recorded as unearned finance charges) when the credit risk and potential
     for losses warrant such allocation.  During 1995, the Company made such
     allocations, which had the effect of reducing the interest rate earned on
     Installment Contracts.  With respect to Installment Contracts purchased
     during 1996, the Company did not allocate to nonrefundable acquisition
     discount any contract interest that would otherwise have been recorded as
     unearned finance charges.  SEE "Accounting Matters." 

(3)  Net interest margin represents net interest income on an annualized basis
     divided by average net finance receivables.


     The principal component of the Company's net income is its net interest 
spread.  Net interest spread represents the difference between interest 
earned on finance receivables and interest paid for borrowed funds.  The laws 
of certain states establish the maximum interest rates, and prescribe the 
types and maximum amounts of fees, insurance premiums and other amounts that 
consumers may be charged.  As is common in its market segment, the Company's 
Installment Contracts generally bear the maximum allowable interest rates, 
fees, premiums and other charges permitted under state law.

                                    11

<PAGE>

     The Company's liabilities are generally more interest-rate sensitive 
than its finance receivables. A primary source of funding for the Company is 
the Revolving Credit Agreement with a group of commercial banks with 
CoreStates Bank, N.A. as agent.  SEE "Liquidity and Capital Resources."  The 
maximum amount of the revolving credit facility under the Revolving Credit 
Agreement is $90 million (subject to reduction pursuant to the terms of the 
Revolving Credit Agreement that provide for the reduction of the facility to 
$50 million by March, 1997). Under the Revolving Credit Agreement, the 
Company has the option of borrowing funds at an interest rate equal to either 
the prime rate of the agent bank or the LIBOR rate plus 2.5%.  Prior to the 
extension of the revolving credit facility, the Revolving Credit Agreement 
provided that the interest rate for LIBOR borrowings was LIBOR plus 2.00%. On 
September 30, 1996, the prime rate was 8.25% and the three-month LIBOR rate 
was 5.625%.

FINANCIAL CONDITION

     Total assets decreased $17.4 million (12.5%) to $121.7 million at 
September 30, 1996 from $139.1 million at December 31, 1995 primarily due to 
a decline in net finance receivables (net of dealer reserves, nonrefundable 
acquisition discount and allowance for credit losses) to $106.3 million at 
September 30, 1996 from $125.5 million at December 31, 1995.  The decline in 
assets and finance receivables is, in part, attributable to the sale of 
approximately $34.3 million and $9.4 million (net) of Installment Contracts 
to GECC and Search Capital, respectively, during the first nine months of 
1996 and the September 1996.  Total assets were $126.2 million at September 
30, 1995 and net finance receivables (net of dealer reserves, nonrefundable 
acquisition discount and allowance for credit losses) were $119.8 million at 
such date.  The net amount of managed Installment Contracts decreased to 
$164.2 million at September 30, 1996 from $184.4 million at December 31, 
1995.  The net amount of managed Installment Contracts was $185.7 million at 
September 30, 1995. 

     Total liabilities decreased $17.8 million (14.4%) to $105.6 million at 
September 30, 1996 from $123.4 million at December 31, 1995, primarily due to 
a decrease in total debt to $102.5 million at September 30, 1996 from $118.7 
million at December 31, 1995.  The decrease in total debt was primarily the 
result of a reduction in borrowings under the Revolving Credit Agreement to 
$83.0 million at September 30, 1996 from $99.7 million at December 31, 1995. 
SEE "Liquidity and Capital Resources."  Total liabilities were $106.9 million 
at September 30, 1995, which included total debt of $101.2 million primarily 
comprised of borrowings under the Revolving Credit Agreement of $81.8 million.





                                       12



<PAGE>

RESULTS OF OPERATIONS

     The following table sets forth certain data relating to the Company's 
results of operations for the three and nine months ended September 30, 1996 
and 1995:

<TABLE>
<CAPTION>
                                                FOR THE THREE MONTHS    FOR THE NINE MONTHS
                                                ENDED SEPTEMBER 30,     ENDED SEPTEMBER 30,
                                                --------------------    --------------------
                                                 1996        1995        1996         1995
                                                ------      ------      ------       -------
                                                               (DOLLARS IN THOUSANDS)
<S>                                             <C>         <C>         <C>          <C>
Automobile portfolio interest and fee 
  income                                        $6,878      $7,162     $22,181       $17,788
                                                ------      ------      ------       -------
Total interest and fee income                   $6,949      $7,167     $22,309       $17,908
Total interest expense                           2,406       2,333       7,279         5,564
                                                ------      ------      ------       -------
Net interest income before provision for    
  credit losses                                  4,543       4,834      15,030        12,344
Provision for credit losses                      1,730          --       6,626           (53)
                                                ------      ------      ------       -------
Net interest income after provision for 
  credit losses                                  2,813       4,834       8,404        12,397
                                                ------      ------      ------       -------
 Other Income:
 Servicing income (from Installment
   Contracts)                                    1,758         308       4,111         1,666
 Insurance products commissions                      9          63          44           230
                                                ------      ------      ------       -------
Total other income                               1,767         371       4,155         1,896
                                                ------      ------      ------       -------
Salaries and related costs                       2,034       1,545       5,916         4,115
Other operating expenses                         2,199       1,307       6,006         3,643
                                                ------      ------      ------       -------
Total operating expenses                         4,233       2,852      11,922         7,758
                                                ------      ------      ------       -------
Income before taxes                                347       2,353         637         6,535
Taxes                                              133         924         212         2,552
                                                ------      ------      ------       -------
Net income                                      $  214      $1,429      $  425       $ 3,983
                                                ======      ======      ======       =======
</TABLE>

     COMPARISON OF NINE MONTHS ENDED SEPTEMBER 30, 1996 TO NINE MONTHS ENDED 
SEPTEMBER 30, 1995.  Net income decreased by 89.3% to $425,000 for the nine 
months ended September 30, 1996 from $4.0 million for the comparable 1995 
period, primarily due to the difference in the manner in which the Company 
established reserves for credit losses during the two periods and the 
resulting increase in the provision for credit losses for the nine months 
ended September 30, 1996 as well as increases in credit losses during the 
1996 period.  SEE "Accounting Matters."

     Net interest income before the provision for credit losses increased 
22.0% to $15.0 million for the nine months ended September 30, 1996 from 
$12.3 million for the comparable 1995 period, primarily as a result of 
increased income from the Installment Contracts portfolio.  The average 
interest rate earned on net finance receivables and net interest spread for 
the nine months ended September 30, 1996, as compared to the corresponding 
figures for the nine months ended September 30, 1995, improved primarily as a 
result of the manner in which the Company established its reserves for credit 
losses.  SEE "Accounting Matters." During the nine months ended September 30, 
1996, the Company sold $43.7 million (net) Installment Contracts, $34.3 
million (net) of which were sold to GECC, compared to sales of $39.9 million 
during the nine months ended September 30, 1995.  Although the Company's 
periodic sales of finance receivables 


                                    13

<PAGE>

to GECC have a negative effect on interest and fee income, because these 
sales are made with servicing retained by the Company, they result in 
increased servicing income.

     Total interest expense increased to $7.3 million for the nine months 
ended September 30, 1996 from $5.6 million for the nine months ended 
September 30, 1995.  The increase resulted from an increase in the amount of 
average debt outstanding, partially offset by a decline in interest rates 
paid on borrowed funds.  The total debt outstanding at September 30, 1996 
increased to $102.5 million from $101.2 million at September 30, 1995.  The 
average debt outstanding for the nine months ended September 30, 1996 
increased to $110.4 million from $80.5 million for the nine months ended 
September 30, 1995.  The weighted average interest rate paid for borrowed 
funds decreased to 8.79% for the nine months ended September 30, 1996 from 
9.21% for the nine months ended September 30, 1995.

     The provision for credit losses was $6.6 million for the nine months 
ended September 30, 1996 as compared to ($53,000) for the nine months ended 
September 30, 1995.  This significant increase was due to the manner in which 
the Company established its reserves for credit losses during the two periods 
and higher losses experienced on Installment Contracts during the nine months 
ended September 30, 1996 than during the corresponding period in 1995.  SEE 
"Accounting Matters," and "Credit Loss Experience."

     Other income, including servicing income and commissions from the sale 
of Insurance Products, increased 121.1% to $4.2 million for the nine months 
ended September 30, 1996 from $1.9 million for the nine months ended 
September 30, 1995, primarily due to an increase in servicing income to $4.1 
million (141.2%) for the nine months ended September 30, 1996 from $1.7 
million for the nine months ended September 30, 1995.  The increase in 
servicing income corresponds to the increased average amount of finance 
receivables serviced by the Company for third parties during the nine months 
ended September 30, 1996 as compared to the comparable 1995 period.  Income 
from the sale of Insurance Products was $44,000 during the nine months ended 
September 30, 1996 as compared to $230,000 during the nine months ended 
September 30, 1995. 

     Total operating expenses increased to $11.9 million for the nine months 
ended September 30, 1996 compared to $7.8 million for the nine months ended 
September 30, 1995.  Salaries and related costs increased from the 
corresponding period in 1995 to $5.9 million for the nine months ended 
September 30, 1996, due primarily to the substantial increase in the number 
of employees, normal pay increases and increased benefits costs.  The 
Company's other operating expenses increased to $6.0 million for the nine 
months ended September 30, 1996 compared to the nine months ended September 
30, 1995, also due to the growth of the Company and higher professional fees. 
 Total operating expenses (annualized) as a percentage of average net finance 
receivables owned or serviced increased to 8.9% for the nine months ended 
September 30, 1996 as compared to 7.2% for the nine months ended September 
30, 1995.

     Income tax expense decreased 91.7% to $212,000 for the nine months ended 
September 30, 1996 from $2.6 million for the nine months ended September 30, 
1995.  The decrease resulted from a lower level of pretax income and a lower 
effective tax rate during the nine months ended September 30, 1996 versus the 
corresponding period in 1995.

                                    14

<PAGE>

     COMPARISON OF THREE MONTHS ENDED SEPTEMBER 30, 1996 TO THREE MONTHS 
ENDED SEPTEMBER 30, 1995.  Net income decreased by 85.0% to $214,000 for the 
three months ended September 30, 1996 from $1.4 million for the comparable 
1995 period, primarily due to the difference in the manner in which the 
Company established reserves for credit losses during the two periods and the 
resulting increase in the provision for credit losses for the three months 
ended September 30, 1996 as well as increases in credit losses during the 
1996 period.  SEE "Accounting Matters." 

     Net interest income before the provision for credit losses decreased 
6.3% to $4.5 million for the three months ended September 30, 1996 from $4.8 
million for the comparable 1995 period, primarily as a result of reduced 
income from the Installment Contracts portfolio.  The average interest rate 
earned on net finance receivables and net interest spread for the three 
months ended September 30, 1996, as compared to the corresponding figures for 
the three months ended September 30, 1995, improved as a result of the manner 
in which the Company established its reserves for credit losses.  SEE 
"Accounting Matters."  During the three months ended September 30, 1996, the 
Company sold Texas-originated Installment Contracts totaling $9.4 million 
(net). No similar sales were made during the three months ended September 30, 
1995. 

     Total interest expense increased to $2.4 million for the three months 
ended September 30, 1996 from $2.3 million for the three months ended 
September 30, 1995.  The increase resulted from an increase in the amount of 
average debt outstanding and higher borrowing rates.  The total debt 
outstanding at September 30, 1996 increased to $102.5 million from $101.2 
million at September 30, 1995. The average debt outstanding for the three 
months ended September 30, 1996 increased to $103.9 million from $102.5 
million for the three months ended September 30, 1995.  The weighted average 
interest rate paid for borrowed funds increased to 9.27% for the three months 
ended September 30, 1996 from 9.10% for the three months ended September 30, 
1995.

     The provision for credit losses was $1.7 million for the three months 
ended September 30, 1996 as compared to no provision for credit losses for 
the three months ended September 30, 1995.  This significant increase was due 
to the manner in which the Company established its reserves for credit losses 
during the two periods and higher losses experienced on Installment Contracts 
during the three months ended September 30, 1996 than during the 
corresponding period in 1995.  SEE "Accounting Matters" and "Credit Loss 
Experience."

     Other income, including servicing income and commissions from the sale 
of Insurance Products, increased 375.8% to $1.8 million for the three months 
ended September 30, 1996 from $371,000 for the three months ended September 
30, 1995, primarily due to an increase in servicing income to $1.8 million 
for the three months ended September 30, 1996 from $309,000 for the three 
months ended September 30, 1995.  The increase in servicing income 
corresponds to the increased average amount of finance receivables serviced 
by the Company for third parties during the three months ended September 30, 
1996 as compared to the comparable 1995 period.  Income from the sale of 
Insurance Products was $9,000 during the three months ended September 30, 
1996 as compared to $63,000 during the three months ended September 30, 1995. 

                                     15
<PAGE>

     Total operating expenses increased to $4.2 million for the three months 
ended September 30, 1996 compared to $2.9 million for the three months ended 
September 30, 1995.  Salaries and related costs increased from the 
corresponding period in 1995 to $2.0 million for the three months ended 
September 30, 1996, due primarily to the substantial increase in the number 
of employees, normal pay increases and increased benefits costs.  The 
Company's other operating expenses increased to $2.2 million for the three 
months ended September 30, 1996 compared to the three months ended September 
30, 1995, also due to the growth of the Company and higher professional fees. 
 Total operating expenses (annualized) as a percentage of average net finance 
receivables owned or serviced increased to 9.53% for the three months ended 
September 30, 1996 as compared to 7.82% for the three months ended September 
30, 1995.

     Income tax expense decreased 85.6% to $133,000 for the three months 
ended September 30, 1996 from $924,000 for the three months ended September 
30, 1995. The decrease resulted from a lower level of pretax income and a 
lower effective tax rate during the three months ended September 30, 1996 
versus the corresponding period in 1995.

CREDIT LOSS EXPERIENCE

     The Company's credit loss reserves are comprised of three components: 
nonrefundable acquisition discount; an allowance for credit losses; and, for 
non-Installment Contract finance receivables, refundable dealer reserves.  
The total of allowance for credit losses, nonrefundable acquisition discount 
and dealer reserves equaled 10.2% and 12.5% of net owned finance receivables 
at September 30, 1996 and 1995, respectively.  The following discussion 
reflects the Company's increased emphasis on the allowance for credit losses 
and its reduced emphasis on nonrefundable acquisition discount to establish 
credit loss reserves for the Company's Installment Contracts portfolio.  SEE 
"Accounting Matters."

     NONREFUNDABLE ACQUISITION DISCOUNT AND DEALER RESERVES.  In order to 
achieve an acceptable rate of return and appropriately reflect credit risks 
generally associated with the Company's automobile finance business, the 
Company purchases Installment Contracts from dealers at a discount from their 
principal amount.  The Company negotiates the amount of the discounts with 
dealers based upon various criteria, one of which is the credit risk 
associated with the contracts being purchased.  The discount is nonrefundable 
and is allocated to the nonrefundable acquisition discount account.  As part 
of the Company's financing of retail installment sale contracts (other than 
Installment Contracts), refundable dealer reserves may be established to 
protect the Company from losses associated with such contracts.










                                   16


<PAGE>

     The following table presents a reconciliation of the changes in
nonrefundable acquisition discount and dealer reserves for the three and nine
months ended September 30, 1996 and 1995:

<TABLE>
<CAPTION>
                                     FOR THE THREE MONTHS   FOR THE NINE MONTHS
                                      ENDED SEPTEMBER 30,   ENDED SEPTEMBER 30,
                                     --------------------   -------------------
                                         1996      1995       1996      1995
                                     ----------  --------   --------   --------
                                                (DOLLARS IN THOUSANDS)
<S>                                     <C>      <C>       <C>        <C>
Balance at beginning of period         $ 5,649   $15,722   $  9,721   $  8,745
Additions applicable to new volume       3,261    10,941      8,642     28,579
Reductions applicable to accounts sold     --     (3,507)    (3,982)    (5,525)
Losses charged, net of recoveries       (4,842)   (7,386)   (10,313)   (16,029)
                                        -------  -------   --------   --------
Balance at end of period               $ 4,068   $15,770   $  4,068   $ 15,770
                                       -------   -------   --------   --------
                                       -------   -------   --------   --------
</TABLE>

     ALLOWANCE AND PROVISION FOR CREDIT LOSSES/CHARGE-OFFS.  The Company
maintains an allowance for credit losses at a level management believes adequate
to absorb potential losses in its finance receivables portfolio.  Management
evaluates the adequacy of the allowance for credit losses by reviewing credit
loss experience and delinquency trends using static pool analysis, the value of
the underlying collateral and general economic conditions and trends.  A
provision for losses is charged to earnings in an amount sufficient to maintain
the allowance for credit losses at the level believed adequate by management. 
The Company's general policy is to charge off delinquent accounts when they are
deemed uncollectible, and in any event prior to their becoming 90 days
contractually delinquent.  The Company has experienced higher charge-off rates
during the three and nine months ended September 30, 1996 than during the
corresponding periods of 1995.

     The following table reflects the Company's allowance for credit losses and
provision for credit losses for the three and nine months ended September 30,
1996 and 1995:

<TABLE>
<CAPTION>
                                     FOR THE THREE MONTHS   FOR THE NINE MONTHS
                                      ENDED SEPTEMBER 30,   ENDED SEPTEMBER 30,
                                     -------------------    -------------------
                                       1996      1995         1996       1995
                                     -------   ---------    -------    --------
                                                 (DOLLARS IN THOUSANDS)
<S>                                  <C>       <C>          <C>        <C>
Balance at beginning of period       $ 8,892   $1,242       $10,807    $1,248
Provision charged to expense           1,730     --           6,626       (59)
Finance receivables charged off       (2,678)     (18)       (9,534)      (46)
Recoveries                                 6       35            51       116
                                     -------   -------      -------    ------
Balance at end of period             $ 7,950   $1,259       $ 7,950    $1,259
                                     -------   -------      -------    ------
                                     -------   -------      -------    ------
Allowance as a percentage of net
 finance receivables (owned) at
 end of period                          6.47%     0.92%        6.47%     0.92%

</TABLE>
                                        17

<PAGE>

DELINQUENCIES

     Managed finance receivables that were 60 days and greater contractually
delinquent (net of unearned finance charges) were $3.1 million, $3.5 million and
$4.0 million, representing 1.9%, 1.9% and 2.2% of net managed finance
receivables, as of September 30, 1996, December 31, 1995 and September 30, 1995,
respectively.  Owned finance receivables that were 60 days and greater
contractually delinquent (net of unearned finance charges) were $2.3 million,
$3.0 million and $3.5 million, representing 1.9%, 2.6% and 2.5% of net owned
finance receivables, as of September 30, 1996, December 31, 1995 and September
30, 1995, respectively.

LIQUIDITY AND CAPITAL RESOURCES

     The Company finances its operations through cash flow from operations,
borrowings under the Revolving Credit Agreement, borrowings from certain
companies and partnerships in which either or both of Charles F. Wonderlic or
Ronald B. Clonts and members of their immediate families own a direct or
indirect controlling interest (each, a "Commonly Controlled Company"),
subordinated indebtedness and from the periodic sale of Installment Contracts
and other finance receivables.

     Net cash provided by (used in) operating activities totaled ($3.2) million
and $2.2 million during the three months ended September 30, 1996 and 1995,
respectively.  For the nine months ended September 30, 1996 and 1995, net cash
provided by (used in) operating activities totaled ($11.0) million and $11.6
million, respectively.  During these periods, the primary source of net cash
provided by (used in) operating activities has been net income, the net change
in the allowance for credit losses, the net change in the nonrefundable
acquisition discount account and the amount of net finance receivables charged-
off.  Net cash used in operating activities for the three and nine months ended
September 30, 1996 was affected by the net change in the allowance for credit
losses, the net change in the nonrefundable acquisition discount account and the
amount of net finance receivables charged-off.  Net cash provided by operating
activities for the three and nine months ended September 30, 1995 was affected
by the level of net income and the net change in the nonrefundable acquisition
discount account.

     Net cash provided by (used in) investing activities represents the net
investment in, or liquidation of, finance receivables, which for the three-month
period ended September 30, 1996 and 1995 was $1.5 million and ($9.2) million,
respectively.  For the nine months ended September 30, 1996 and 1995, net cash
provided by (used in) investing activities was $27.7 million and ($58.3)
million, respectively.  During the three and nine months ended September 30,
1996, cash provided from the bulk sale of Installment Contracts was $9.5 million
and $43.7 million, respectively.

     Net cash provided by (used in) financing activities for the three and nine
months ended September 30, 1996 and the comparable 1995 periods largely result
from borrowings and repayments under the Revolving Credit Agreement.  Net cash
provided by (used in) financing activities for the three months ended September
30, 1996 was $2.3 million and net cash provided by financing activities for the
three months ended September 30, 1995 was $7.7 million.  For the


                                        18

<PAGE>

nine months ended September 30, 1996 and 1995, net cash provided by (used in) 
financing activities was ($16.6) million and $47.8 million, respectively.

     The self-liquidating nature of Installment Contracts and Other Loans
enables the Company to assume a higher debt-to-equity ratio than in most other
businesses.  The amount of debt the Company incurs from time to time depends on
the Company's need for cash and its ability to borrow under the terms of the
Revolving Credit Agreement.  The Company intends to meet its short- and long-
term liquidity needs with cash flow from operations, borrowings under the
Revolving Credit Agreement, the sale or securitization of finance receivables
and the proceeds from the issuance of securities in the capital markets.

     While the Company must comply with customary financial and other covenants
under the Revolving Credit Agreement, the Company believes they will not
materially limit its business strategy.  During September, 1996, the Company
entered into an amendment to the Revolving Credit Agreement that, among other
things, reduced the maximum availability under the facility to $90 million (this
amount declines to $50 million by March, 1997), extended the maturity date to
June 30, 1997 and modified certain other terms of the revolving credit facility,
including the cost of LIBOR borrowings (which was increased to LIBOR plus 2.5%
from LIBOR plus 2%).  In October 1996, the Company completed its first
securitization, and anticipates relying more heavily upon, alternative funding
sources such as securitization financing.

     At September 30, 1996, the Company had total debt of $102.5 million as
compared to $118.7 million at December 31, 1995 and $101.2 million at September
30, 1995.  At September 30, 1996, $6.9 million was available under the Revolving
Credit Agreement from committed financial institutions.  The following table
presents the Company's debt instruments and the weighted average interest rates
on such instruments for the periods indicated:

<TABLE>
<CAPTION>
                                FOR THE NINE MONTHS ENDED SEPTEMBER 30,
                                ---------------------------------------       FOR THE TWELVE MONTHS
                                        1996            1995                 ENDED DECEMBER 31, 1995
                                ------------------   ------------------      -----------------------
                                  BALANCE    RATE     BALANCE     RATE        BALANCE        RATE
                                ----------  ------   --------    ------      ---------    ----------
                                                       (DOLLARS IN THOUSANDS)
<S>                               <C>        <C>       <C>        <C>         <C>            <C>
SENIOR:
 Revolving Credit Agreement       $ 83,018   8.39%     $81,800    8.90%       $ 99,650       8.83%
 Loan from Commonly Controlled
  Company                            1,473   4.88%       1,353    5.62%          1,002       5.76%
SUBORDINATED: 
 Notes payable                      18,007  11.04%      18,030   11.77%       $ 18,045      11.60%
                                  --------            --------                --------
Total debt                        $102,498   8.79%    $101,183    9.21%       $118,697       9.17%
                                  --------            --------                --------
                                  --------            --------                --------
</TABLE>
                                        19

<PAGE>

     The following table sets forth information with respect to maturities of
senior and subordinated debt at September 30, 1996:

<TABLE>
<CAPTION>
                                    LOANS FROM
                                     COMMONLY
                     SENIOR BANK    CONTROLLED   SUBORDINATED
       YEAR        LINES OF CREDIT   COMPANY     NOTES PAYABLE    TOTAL
       ----        ---------------  ----------   -------------  --------
                                 (DOLLARS IN THOUSANDS)
<S>                  <C>              <C>           <C>          <C>
       1996          $ 83,018         $ 1,473       $    39      $ 84,530
       1997                                             113           113
       1998                                              40            40
       1999                                             856           856
       2000                                             804           804
       Thereafter                                    16,155        16,155
                     --------         -------      --------      --------
         Total       $ 83,018         $ 1,473      $ 18,007      $102,498
                     --------         -------      --------      --------
                     --------         -------      --------      --------
</TABLE>

     The Company has purchased interest rate caps and interest rate collars in
an aggregate notional amount of $55 million.  The interest rate cap purchased by
the Company in an aggregate notional amount of $15 million protects the Company
against increases in the interest rate of a portion of its revolving debt if the
three-month LIBOR rate exceeds 10.5%.  The interest rate cap expires in July,
1998.

     The interest rate collars purchased by the Company in an aggregate notional
amount of $40 million protect the Company against increases in the interest rate
of its revolving debt when the three-month LIBOR rate exceeds 8%.  The Company
must make payments to the counterparties to the interest rate collars if three-
month LIBOR falls below 5%.  The interest rate collars expire in September,
2000.

     The GECC Agreement provides for the purchase by GECC of Installment
Contracts, on a revolving basis, having maximum principal amount of up to $80
million outstanding at any time.  The original term of the GECC Agreement
expires June 25, 1997, however, the GECC Agreement provides for an automatic
one-year extension through June 25, 1998.

     Total stockholders' equity at September 30, 1996 was $16.1 million as
compared to $15.7 million at December 31, 1995 and $19.3 million at September
30, 1995.  The Company's ability to pay dividends is limited by the Revolving
Credit Agreement.

                          PART II - OTHER INFORMATION


ITEM 1. LEGAL PROCEEDINGS

     The Company has been named as a defendant in the following described
lawsuits:  (i) BLAKE V. EAGLE FINANCE CORP., ET AL. -- on April 25, 1996, the
Company and Charles F. Wonderlic, Ronald B. Clonts, Robert J. Braasch and
Richard E. Wonderlic were named as defendants in a class action complaint filed
by David M. Blake in the United States District Court for the Eastern District
of Missouri, Case Number 96 CV 00788 LOD (the "Blake Complaint").  The Blake
Complaint alleges common law fraud, breach of fiduciary duty, negligence and
violations of the

                                        20
<PAGE>

federal Racketeer Influenced and Corrupt Organizations Act (18 U.S.C. Sec. 
1962 ET SEQ.) based on the filing by the Company of allegedly inaccurate 
quarterly reports with the Securities and Exchange Commission during 1995 and 
the subsequent restatement of earnings by the Company that occurred during 
April 1996; and (ii) REHM V. EAGLE FINANCE CORP., ET AL. -- on April 29, 
1996, the Company and Charles F. Wonderlic, Ronald B. Clonts and Robert J. 
Braasch were named as defendants in a class action complaint filed by Alfred 
Rehm in the United States District Court for the Northern District of 
Illinois, Case Number 96 C 2455 (the "Rehm Complaint").  The Rehm Complaint 
alleges violations of Sections 10b and 20(a) of the Securities and Exchange 
Act of 1934 and Rule 10b-5 promulgated under Section 10b, based on allegedly 
inaccurate press releases and the filing by the Company of allegedly 
inaccurate quarterly reports with the Securities and Exchange Commission 
during 1995 and the subsequent restatement of earnings by the Company that 
occurred during April 1996.  The defendants have moved to dismiss both the 
Blake Complaint and the Rehm Complaint in their entirety.  On October 9, 
1996, the Blake litigation was transferred to the United States District 
Court for the Northern District of Illinois.  The motion to dismiss the Blake 
Complaint remains pending and will be decided by the United States District 
Court for the Northern District of Illinois.  Rehm has responded to 
defendants' motion to dismiss, and that motion is now fully briefed.  The 
Company and the individually named defendants are awaiting the courts' 
rulings on their motions.  In accordance with applicable law and certain 
indemnification agreements entered into with each of the individually named 
defendants, the Company is required to indemnify each of the individually 
named defendants to the maximum extent allowed with respect to the 
above-described lawsuits.  The Company intends to contest the above-described 
lawsuits vigorously.  Although the Company believes that the above-described 
lawsuits are without merit, it is not possible at this time to estimate the 
likelihood of a favorable or adverse result to the Company or the 
individually named defendants.

     The Company has also been named as a defendant in a lawsuit captioned
CLEVELAND ET AL. V. WALLACE AUTO SALES, INC., ET AL.  On September 19, 1996, the
Company and five unnamed officers of the Company were named as defendants in the
above class action complaint filed in the United States District Court for the
Northern District of Illinois, Case No. 96 C 6045 (the "Cleveland Complaint"). 
The Cleveland Complaint alleges violations of the federal Racketeer Influenced
and Corrupt Organizations Act ("RICO"), the Illinois Consumer Fraud Act and the
Illinois Sales Finance Agency Act.  The plaintiffs purport to represent a class
of plaintiffs who executed contracts that provide for an "amount financed" that
exceeds the retail or loan value of the car by 25% or more and whose contracts
have been assigned to the Company.   The Company intends to file a motion to
dismiss the Cleveland Compliant in its entirety.  Although the Company intends
to contest the above described lawsuits vigorously and believes the Cleveland
Complaint has numerous substantial deficiencies and that the Company has a
number of defenses, it is not possible at this time to estimate the likelihood
of a favorable or adverse result to the Company or the individually named
defendants.

ITEM 2.   CHANGES IN SECURITIES - None

ITEM 3.   DEFAULTS UPON SENIOR SECURITIES - None

ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS - 
          None


                                        21
<PAGE>

ITEM 5.   OTHER INFORMATION - None

ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K
     
     (a)  Exhibits

          10.1 Third Amendment to Amended and Restated Revolving Credit
               Agreement dated June 30, 1996
          
          11   Statement re computation of per share earnings

          27   Financial Data Schedule

          99.1 Press release issued by the Company announcing earnings for the
               three and nine months ended September 30, 1996

     (b)  Reports on Form 8-K - The Company did not file a report on Form 8-K
          during the three months ended September 30, 1996.


                                        22

<PAGE>

                                   SIGNATURES


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

                                        EAGLE FINANCE CORP.



Date:  November 12, 1996                ROBERT J. BRAASCH  
                                        -------------------------------
                                        Robert J. Braasch
                                        President and Chief Financial Officer
                                        (Duly Authorized Officer and Principal
                                        Financial Officer)







                                        S-1

<PAGE>

                                  EXHIBIT INDEX


Exhibit
  No.     Description
-------   -----------
10.1      Third Amendment to Amended and Restated Revolving Credit Agreement
          dated June 30, 1996

11       Statement re computation of per share earnings

27       Financial Data Schedule

99.1     Press release issued by the Company announcing earnings for the three
         and nine months ended September 30, 1996