Form 10-Q Quarterly Report

                                    FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

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

                  For the quarterly period ended June 30, 1999

                                       OR

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

                         Commission File Number: 1-7614
                          -----------------------------

                              PMCC FINANCIAL CORP.
             (Exact Name of Registrant as Specified in its Charter)


          Delaware                                    11-3404072
(State or other Jurisdiction of                    (I.R.S. Employer
Incorporation or Organization)                   Identification Number)


                               3 Expressway Plaza
                           Roslyn Heights, N.Y. 11577
              (Address of Principal Executive Offices and Zip Code)

                                 (516) 625-3000
              (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  ________

     Number of shares  outstanding of the issuer's Common Stock,  par value $.01
per share, as of August 10, 1999: 3,724,800 shares.


<PAGE>


                              PMCC FINANCIAL CORP.

                                    FORM 10-Q

                                TABLE OF CONTENTS
<TABLE>
<CAPTION>

                                                                                          Page No

Part I - Financial Information

<S>                                                                                       <C>
Item 1.  Financial Statements:

         Condensed Consolidated Statements of Operations (Unaudited)
                  Three Months Ended June 30, 1999 and 1998                              3
                  Six Months Ended June 30, 1999 and 1998                                4

         Condensed Consolidated Statements of Financial Condition (Unaudited)
                  June 30, 1999 and December 31, 1998                                    5

         Condensed Consolidated Statements of Cash Flows (Unaudited)
                  Six Months Ended June 30, 1999 and 1998                                6

         Notes to Condensed Consolidated Financial Statements (Unaudited)                7


Item 2.  Management's Discussion and Analysis of Financial Condition
         and Results of Operations                                                       10

Part II -  Other Information                                                             17

Signatures                                                                               18

Exhibit Index                                                                            19


</TABLE>

<PAGE>


                         Part I - FINANCIAL INFORMATION

Item 1.  Financial Statements

                      PMCC FINANCIAL CORP. and SUBSIDIARIES
                 Condensed Consolidated Statements of Operations
                                   (Unaudited)
<TABLE>
<CAPTION>

                                                                      Three Months Ended June 30,
                                                                         1999              1998
<S>                                                                   <C>               <C>
Revenues:
Sales of residential rehabilitation properties                        $10,037,429       $8,546,493
Gains on sale of mortgage loans, net                                    4,078,815        3,676,417
Interest earned                                                         1,036,909        1,449,670
                                                                        ---------        ---------
                                                                       15,153,153       13,672,580
Expenses:
Costs of sales, residential rehabilitation properties                   9,151,254        7,829,482
Compensation and benefits                                               2,874,131        2,281,622
Interest expense                                                        1,018,959        1,473,049
Other general and administrative                                        1,207,836          948,232
                                                                        ---------        -------
                                                                       14,252,180       12,532,385


Income before income tax expense                                          900,973        1,140,195
Income tax expense                                                        369,000          467,000
                                                                          -------          -------
         Net  Income                                                     $531,973         $673,195
                                                                         ========         ========


Net income per share of common stock-basic                                   0.14             0.18
                                                                             ====             ====

Net income per share of common stock-diluted                                 0.14             0.18
                                                                             ====             ====

Weighted average number of shares and
  share equivalents outstanding-basic                                   3,724,800        3,750,000
                                                                        =========        =========

Weighted average number of shares and
  share equivalents outstanding-diluted                                 3,759,146        3,826,379
                                                                        =========        =========
</TABLE>

See accompanying notes to unaudited condensed consolidated financial statements.

<PAGE>



                      PMCC FINANCIAL CORP. and SUBSIDIARIES
                 Condensed Consolidated Statements of Operations
                                   (Unaudited)

<TABLE>
<CAPTION>

                                                                     Six Months Ended June 30,
                                                                         1999              1998
<S>                                                                   <C>              <C>
Revenues:
Sales of residential rehabilitation properties                        $18,582,407      $16,759,170
Gains on sale of mortgage loans, net                                    7,886,718        6,761,807
Interest earned                                                         2,356,344        2,309,494
                                                                        ---------        ---------
                                                                       28,825,469       25,830,471
Expenses:
Costs of sales, residential rehabilitation properties                  16,955,448       15,418,658
Compensation and benefits                                               5,604,762        4,470,700
Interest expense                                                        2,198,915        2,373,574
Other general and administrative                                        2,363,480        1,668,545
                                                                        ---------        ---------
                                                                       27,122,605       23,931,477


Income before income tax expense                                        1,702,864        1,898,994
Income tax expense                                                        698,000        1,595,000
                                                                          -------        ---------
         Net  Income                                                    1,004,864         $303,994
                                                                        =========         ========

Pro forma information:                                                                  $1,898,994
Provision for pro forma income taxes                                                     (779,000)
                                                                                         ---------
Pro forma net income                                                                    $1,119,994
                                                                                        ==========

Net income/pro forma net income per share of common
stock-basic                                                                 $0.27            $0.33
                                                                            =====            =====

Net income/pro forma net income per share of common
stock-diluted                                                               $0.27            $0.32
                                                                            =====            =====

Weighted average number of shares and
  share equivalents outstanding-basic                                   3,724,800        3,418,508
                                                                        =========        =========

Weighted average number of shares and
  share equivalents outstanding-diluted                                 3,759,146        3,489,381
                                                                        =========        =========
</TABLE>

See accompanying notes to unaudited condensed consolidated financial statements.
<PAGE>




                      PMCC FINANCIAL CORP. AND SUBSIDIARIES
            Condensed Consolidated Statements of Financial Condition
                                   (Unaudited)

<TABLE>
<CAPTION>

                                                                      June 30,       December 31,
                                                                        1999             1998
<S>                                                                     <C>             <C>
Assets
Cash and cash equivalents                                               $3,514,284      $3,596,002
Receivable from sales of loans                                           6,587,145      20,789,470
Mortgage loans held for sale, net                                       45,633,697      67,676,679
Mortgage loans held for investment, net                                  2,007,965       1,717,228
Interest and other receivables, net                                      1,794,239       1,208,454
Residential rehabilitation properties                                   16,293,682      16,491,514
Furniture & equipment, net                                                 825,574         828,226
Prepaid expenses and other assets                                          969,447         501,587
                                                                           -------         -------

Total assets                                                           $77,626,033    $112,809,160
                                                                       ===========    ============


Liabilities and shareholders' equity Liabilities:
 Notes payable-principally warehouse lines of credit                    59,599,965     $94,673,739
 Due to affiliates                                                               -       1,187,998
 Distribution payable                                                            -         277,700
Accrued expenses and other liabilities                                   3,952,630       3,637,149
                                                                         ---------       ---------
Total liabilities                                                       63,552,595      99,776,586
                                                                        ----------      ----------

Shareholders' equity
Common stock                                                                37,500          37,500
Additional paid-in capital                                              10,882,033      10,846,033
Retained earnings                                                        3,315,551       2,310,687
Treasury Stock                                                           (161,646)       (161,646)
                                                                         ---------       ---------
Total  shareholders' equity                                             14,073,438      13,032,574
                                                                        ----------      ----------

Total liabilities and shareholders' equity                             $77,626,033    $112,809,160
                                                                       ===========    ============
</TABLE>
See accompanying notes to unaudited condensed consolidated financial statements


<PAGE>


                      PMCC FINANCIAL CORP. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
<TABLE>
<CAPTION>

                                                                              Six months ended June 30,
                                                                               1999             1998
<S>                                                                           <C>                 <C>
Cash flows from operating activities:
Net income                                                                    $1,004,864          $303,994
    Adjustments to reconcile net income to net cash used in operating
    activities:
         Residential  rehabilitation properties (exclusive of cash paid directly
         to/by independent contractors):
           Contractual fees received                                         (1,626,959)        (1,340,512)
           Proceeds from sales of properties                                  18,582,407         16,759,170
           Costs of properties acquired                                     (16,757,616)       (18,245,290)
         Depreciation and amortization                                           124,675             43,167
         Increase in interest and other  receivables                           (585,785)        (1,200,571)
         Decrease (increase) in mortgage loans held for sale                  21,752,245       (21,680,417)
         Decrease (increase) in receivable from sales of loans                14,202,325        (9,725,480)
         Increase in prepaid expenses and other assets                         (467,860)           (89,587)
         Increase in accrued expenses and other liabilities                      315,481          1,940,300
                                                                                 -------          ---------

         Net cash provided by (used in) operating activities                  36,543,777        (32,796,532
                                                                              ----------        -----------

Cash flows from investing activities:
         Purchase of furniture and equipment                                    (86,023)          (421,099)
                                                                                --------          ---------

Net cash used in investing activities                                           (86,023)          (421,099)
                                                                                --------          ---------

Cash flows from financing activities:
         Distributions to S corporation shareholders, net of
         distribution payable                                                  (277,700)        (2,006,435)
         Net proceeds from sale of common stock                                        -          9,183,325
               (Decrease) increase in due to affiliates                      (1,187,998)            219,347
         Net decrease in notes payable-shareholder                                     -          (293,163)
         Net (decrease) increase in notes payable-warehouse lines of
         credit                                                             (35,073,774)         29,459,706
                                                                            ------------         ----------

Net cash (used in) provided by financing activities                         (36,539,472)         36,562,780
                                                                            ------------         ----------

Net (decrease) increase in cash and cash equivalents                            (81,718)          2,906,455

Cash and cash equivalents at beginning of period                               3,596,002          1,713,405
                                                                               ---------          ---------

Cash and cash equivalents at end of period                                    $3,514,284         $4,619,860
                                                                              ==========         ==========

Supplemental  disclosures  of cash flow  information:
  Cash paid during the year for:
           Interest                                                           $2,270,757         $2,169,682
                                                                              ==========         ==========
           Income taxes                                                          $55,000         $   13,651
                                                                                 =======         ==========
           Loans transferred from loans held for sale to loans                  $290,737         $        -
           held for investment                                                  ========         ==========
</TABLE>

See accompanying notes to unaudited condensed consolidated financial statements


<PAGE>


                      PMCC FINANCIAL CORP. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  June 30, 1999
                                   (Unaudited)

     1. Basis of Presentation

     The unaudited condensed  consolidated  financial statements included herein
reflect all adjustments, which are, in the opinion of management necessary for a
fair  presentation of PMCC Financial Corp. and  subsidiaries  (the  "Company's")
financial  condition as of the dates indicated and the results of operations for
the  periods  shown.  In  preparing  the  accompanying   condensed  consolidated
financial  statements,  management is required to make estimates and assumptions
that reflect the reported  amounts of assets and  liabilities  as of the date of
the condensed  consolidated  statements of financial condition and of income and
expenses for the periods presented in the condensed  consolidated  statements of
operations.  The results of  operations  for the three and six months ended June
30,  1999 are not  necessarily  indicative  of the results of  operations  to be
expected for the remainder of the year. Certain information and note disclosures
normally included in financial  statements prepared in accordance with generally
accepted accounting  principles have been condensed or omitted pursuant to rules
and regulations of the Securities and Exchange Commission.

     These unaudited condensed  consolidated financial statements should be read
in  conjunction  with the audited  consolidated  financial  statements and notes
thereto  included in the  Company's  Form 10-K for the year ended  December  31,
1998.

     Certain reclassifications have been made to conform the prior period's
presentation to the current presentation.

     2. Initial Public Offering

     On February 18, 1998 the shareholders of Premier Mortgage Corp. ("Premier")
exchanged  all of their  outstanding  common  shares of Premier  for 2.5 million
common shares of the Company.  Following this exchange, the Company completed an
initial  public  offering  of 1.25  million  common  shares at a price of $9 per
share.  The Company received gross proceeds of $11.3 million and net proceeds of
approximately $9.2 million.

     At the time of the exchange, the Company agreed to make a cash distribution
to existing  shareholders  of $2.7  million  which was equal to a portion of the
Company's  undistributed  subchapter S corporation earnings.  Approximately $1.9
million of the distribution was paid during the quarter ended March 31, 1998, of
which $1 million  was from the  proceeds  of the initial  public  offering.  The
balance of the distribution was paid in installments  including  interest on the
undistributed  balance at 10% per annum through February 18, 1999. The remaining
undistributed  subchapter S Corporation  earnings of approximately  $1.0 million
were reclassified from retained earnings to additional paid in capital.

     3. Income Taxes

     Prior to February  18,  1998,  certain of the  Company's  subsidiaries  had
elected to be treated as S  corporations  for both  federal and state income tax
purposes.  As a result, the income of the subsidiaries through February 18, 1998
was taxed  directly to the  individual  shareholders.  On February 18, 1998,  in
conjunction  with the  Company's  initial  public  offering,  the S  corporation
elections were terminated and the Company's  subsidiaries  became C corporations
for federal  and state  income tax  purposes  and,  as such,  became  subject to
federal and state income  taxes on their  taxable  income for the periods  after
February 18, 1998. Therefore,  the provision for income taxes for the six months
ended June 30, 1998 includes a provision for deferred income taxes of $1,081,000
related  to the  temporary  differences  existing  at the  termination  of the S
corporation  elections,  and pro forma net income for the six months  ended June
30, 1998  include pro forma income taxes as if the Company had been taxed as a C
corporation throughout the periods.

     4. Earnings Per Share of Common Stock

     Basic EPS is  determined  by  dividing  net  income  for the  period by the
weighted  average  number of common shares  outstanding  during the same period.
Diluted EPS reflects the  potential  dilution  that could occur if securities or
other  contracts to issue common stock were  exercised or converted  into common
stock or resulted in the  issuance of common stock which would then share in the
earnings  of the  Company.  The  additional  number  of shares  included  in the
calculation  of diluted EPS arising from issued stock  options was 34,346 shares
and 70,873 shares, respectively, for the six months ended June 30, 1999 and 1998
and 34,346 and 76,379 shares, respectively,  for the three months ended June 30,
1999 and 1998.

     Actual  earnings per share data for periods prior to February 18, 1998 have
not  been  presented  in  the  accompanying   unaudited  condensed  consolidated
statement of  operations  because the Company was not a public  company.  Actual
earnings per share data for the periods  February 18, 1998 to March 31, 1998 and
February 18, 1998 to June 30, 1998 have not been  presented in the  accompanying
unaudited  condensed  consolidated  statement of operations  because  management
believes  that such data  would not be  meaningful  given the  relatively  short
period  and the  impact  of the  recognition  of a  deferred  tax  liability  in
connection with the change in tax status. Therefore, the earnings per share data
presented for the six months ended June 30,1998 is based on proforma net income.





     5. Supplemental Information

     The Company's  operations consist of two principal  activities (a) mortgage
banking and (b) funding the purchase,  rehabilitation  and resale of residential
real estate. The following table sets forth-certain information concerning these
activities (in thousands):
<TABLE>
<CAPTION>

                                                                       Six Months Ended June 30,
                                                                           1999           1998
<S>                                                                        <C>            <C>
         Revenues:
            Residential rehabilitation properties                          $ 18,582       $  16,759
            Mortgage banking                                                 10,243           9,071
                                                                            -------       ---------
                                                                           $ 28,825       $  25,830
                                                                           ========       =========
         Less: (1)
            Expenses allocable to residential rehabil-
              itation properties (cost of sales, interest
              expense and compensation and benefits)                         17,902          16,168
            Expenses allocable to mortgage banking
               (all other)                                                    9,221           7,763
                                                                           --------       ---------
                                                                           $ 27,123       $  23,931
                                                                           ========       =========

         Operating Profit:
              Residential rehabilitation properties                             680             591
              Mortgage banking                                                1,022           1,308
                                                                           --------      ----------
                                                                             $1,702      $    1,899
                                                                            =======      ==========

         Identifiable Assets (at June 30, 1999 and
           June 30, 1998, respectively):
              Residential rehabilitation properties                       $  16,294      $  14,411
              Mortgage banking                                               61,332         92,823
                                                                          ---------      ---------
                                                                          $  77,626      $ 107,234
                                                                          =========      =========
</TABLE>

(1) In managing its business,  the Company does not allocate  corporate expenses
other than interest and compensation and benefits to its various activities.


<PAGE>




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

     Forward-Looking Statements

     The  Private  Securities  Litigation  Reform  Act of 1995  provides a "safe
harbor" for certain  forward-looking  statements.  This Quarterly Report on Form
10-Q may contain forward-looking statements, which reflect the Company's current
views  with  respect  to  future   events  and  financial   performance.   These
forward-looking  statements  are  subject  to certain  risks and  uncertainties,
including  those  identified  below,  which could cause actual results to differ
materially from historical  results or those  anticipated.  The words "believe,"
"expect,"  "anticipate,"  "intend,"  "estimate,"  and  other  expressions  which
indicate future events and trends identify forward-looking  statements.  Readers
are cautioned not to place undue reliance upon these forward-looking statements,
which speak only as of their dates.  The Company  undertakes  no  obligation  to
publicly update or revise any forward-looking statements,  whether as the result
of new  information,  future  events or otherwise.  The following  factors could
cause  actual  results to differ  materially  from  historical  results or those
anticipated:  (1) the level of demand for mortgage credit,  which is affected by
such external  factors as the level of interest  rates,  the strength of various
segments of the economy and demographics of the Company's  lending markets;  (2)
the direction of interest rates; (3) the relationship  between mortgage interest
rates and cost of funds;  (4)  federal  and state  regulation  of the  Company's
mortgage  banking  operations;  (5)  competition  within  the  mortgage  banking
industry  and (6) the  potential  adverse  effects  of Y2K  (year  2000) (7) the
Company's management of rapid growth and expansion.

     Results of Operations

     Three  Months  Ended June 30, 1999  Compared to Three Months Ended June 30,
1998

     General Overview

     Due to continuing  adverse  conditions in the sub-prime  (BCD) market,  the
Company,  during the second  quarter 1999 closed its Roslyn,  New York sub-prime
division and  transferred its remaining  sub-prime  operations to its New Jersey
office.  However,  while the Company's  conservative  posture on these loans has
reduced  loss  exposure to almost  zero,  originations  of these loans have been
reduced by approximately 80% from the corresponding quarter.

     During  the  second  quarter  the  Company  sold a  substantial  amount  of
sub-prime loans in the secondary market at par or slightly below as opposed to a
normal  markup of these loans at between 4 and 6 points  above par.  The Company
estimates  that the above  inventory  losses  coupled with employee  termination
costs approximate $400,00.00 and are non-recurring.

     Revenues.  The following  table sets forth the  components of the Company's
revenues for the periods indicated:
<TABLE>
<CAPTION>

                                                                     Three Months Ended  June 30,
                                                                   1999                       1998

<S>                                                             <C>                      <C>
Sales of residential rehabilitation properties                  $ 10,037,429             $  8,546,493
Gains on sales of mortgage loans, net                              4,078,815                3,676,417
Interest earned                                                    1,036,909                1,449,670
                                                                ------------             ------------
Total revenue                                                   $ 15,153,153             $ 13,672,580
                                                                ============             ============
</TABLE>


     Revenues from the sale of residential  rehabilitation  properties increased
$1.5 million,  or 17%, to $10.0 million for the three months ended June 30, 1999
from $8.5 million for the three months  ended June 30, 1998.  This  increase was
primarily the result of the increase in the number of residential rehabilitation
properties  sold to 64 for the three  months ended June 30, 1999 from 56 for the
three months ended June 30, 1998.


     Gains on sales of mortgage loans increased $ 0.4 million, or 11 %, to $ 4.1
million for the three months ended June 30, 1999 from $3.7 million for the three
months ended June 30, 1998.  This increase was  primarily due to increased  loan
originations  from  the  Company's  existing  retail  offices  offset  by an 80%
decrease in subprime loan  originations.  Mortgage loan originations were $144.4
million and $139.6  million for the three  months  ended June 30, 1999 and 1998,
respectively. For the three months ended June 30, 1999, approximately 55% of the
Company's mortgage originations were derived from its retail mortgage operations
and  approximately  45% from  its  wholesale  operations.  The  following  table
summarizes the Company's mortgage originations (in millions):
<TABLE>
<CAPTION>

                                                              Three Months Ended June 30,
                                                                1999             1998

<S>                                                          <C>              <C>
                           Conventional                      $  91,915        $ 93,120
                           FHA/VA                               48,581          26,876
                           BCD                                   3,943          19,576
                                                             ---------        --------
                           Total                              $144,439        $139,572
                                                             =========        ========
</TABLE>

     Although there can be no assurance  thereof,  the Company expects  mortgage
originations  to increase and therefore  believes its gains on sales of mortgage
loans will increase.

     Interest  earned  decreased  $0.4 million,  or 28%, to $1.0 million for the
three  months  ended June 30, 1999 from $1.4  million for the three months ended
June 30, 1998. This decrease was primarily due to decreased  subprime  mortgages
generally held for sale longer than conventional mortgages.

     Expenses.  The following  table sets forth the  Company's  expenses for the
periods indicated:


<PAGE>

<TABLE>
<CAPTION>


                                                          Three Months Ended June 30,
                                                              1999                1998

<S>                                                      <C>                <C>
Cost of sales - residential rehabilitation properties    $ 9,151,254        $   7,829,482
Compensation and benefits                                  2,874,131            2,281,622
Interest expense                                           1,018,959            1,473,049
Other general and administrative                           1,207,836              948,232
                                                         -----------          -----------
Total expenses                                           $14,252,180          $12,532,385
                                                         ===========          ===========
</TABLE>

     Cost of  sales  -  residential  rehabilitation  properties  increased  $1.3
million,  or 17%, to $9.2  million for the three months ended June 30, 1999 from
$7.8  million  for the three  months  ended June 30,  1998.  This  increase  was
primarily  due  to  the  increase  in  the  number  of   properties   purchased,
rehabilitated and sold.

     Compensation and benefits  increased $0.6 million,  or 26%, to $2.9 million
for the three  months ended June 30, 1999 from $2.3 million for the three months
ended June 30,1998.  This increase was primarily due to increased sales salaries
and commission,  which are based  substantially  on mortgage loan  originations.
Total personnel increased to 172 employees at June 30, 1999 from 126 at June 30,
1998.

     Interest  expense  decreased $0.5 million,  or 31%, to $1.0 million for the
three  months  ended June 30, 1999 from $1.5  million for the three months ended
June 30, 1998.  This  decrease  was  primarily  attributable  to the decrease in
subprime  loan  originations  funded  through the Company's  warehouse  lines of
credit.

     Other general and administrative expense increased $0.3 million, or 27%, to
$1.2  million for the three months ended June 30, 1999 from $0.9 million for the
three months ended June 30, 1998.  This  increase was primarily due to increased
expenses incurred in connection with the growth in the operations of the Company
including rent and facilities expense, telephone and marketing.

     Although there can be no assurance  thereof,  the Company believes that the
expected increase in mortgage origination volume and residential  rehabilitation
activities will result in increased expenses.

     Net income  decreased  $0.2  million or 21%, to $0.5  million for the three
months ended June 30, 1999 from $0.7 million for the three months ended June 30,
1998.

     Six Months Ended June 30, 1999 Compared to Quarter Ended June 30, 1998

     Revenues.  The following  table sets forth the  components of the Company's
revenues for the periods indicated:


<PAGE>
<TABLE>
<CAPTION>



                                                                      Six Months Ended  June 30,
                                                                     1999                    1998
<S>                                                             <C>                     <C>

Sales of residential rehabilitation properties                  $  18,582,407           $  16,759,170
Gains on sales of mortgage loans, net                               7,886,718               6,761,807
Interest earned                                                     2,356,344               2,309,494
                                                                -------------           -------------
Total revenue                                                   $  28,825,469           $  25,830,471
                                                                =============           =============

</TABLE>

     Revenues from the sale of residential  rehabilitation  properties increased
$1.8  million,  or 11%, to $18.6  million for the six months ended June 30, 1999
from $16.8  million for the six months  ended June 30, 1998.  This  increase was
primarily the result of the increase in the number of residential rehabilitation
properties  sold to 116 for the six months  ended June 30, 1999 from 109 for the
six months ended June 30, 1998.

     Gains on sales of mortgage loans  increased  $1.1 million,  or 17%, to $7.9
million  for the six months  ended June 30,  1999 from $6.8  million for the six
months ended June 30, 1998.  This increase was  primarily due to increased  loan
originations and loan sales from the Company's existing retail offices offset by
a 74% decrease in subprime loan  originations.  Mortgage loan  originations were
$279.3  million and $240.1  million  for the six months  ended June 30, 1999 and
1998, respectively. For the six months ended June 30, 1999, approximately 56% of
the  Company's  mortgage  originations  were  derived  from its retail  mortgage
operations and  approximately 44% from its wholesale  operations.  The following
table summarizes the Company's mortgage originations (in millions):
<TABLE>
<CAPTION>

                                                                  Six Months Ended June 30,
                                                                   1999           1998

<S>                                                             <C>             <C>
                           Conventional                         $181,358        $155,503
                           FHA/VA                                 88,387          48,403
                           BCD                                     9,537          36,201
                                                                --------        --------
                           Total                                $279,282        $240,107
                                                                ========        ========
</TABLE>

     Although there can be no assurance  thereof,  the Company expects  mortgage
originations  to increase and therefore  believes its gains on sales of mortgage
loans will increase.


     Expenses.  The following  table sets forth the  Company's  expenses for the
periods indicated:
<TABLE>
<CAPTION>

                                                              Six Months Ended June 30,
                                                              1999                 1998

<S>                                                        <C>                 <C>
Cost of sales - residential rehabilitation properties      $16,955,448         $15,418,658
Compensation and benefits                                    5,604,762           4,470,700
Interest expense                                             2,198,915           2,373,574
Other general and administrative                             2,363,480           1,668,545
                                                           -----------         -----------
Total expenses                                             $27,122,605         $23,931,477
                                                           ===========         ===========
</TABLE>

     Cost of  sales  -  residential  rehabilitation  properties  increased  $1.5
million,  or 10%, to $17.0  million for the six months  ended June 30, 1999 from
$15.4  million  for the six  months  ended  June 30,  1998.  This  increase  was
primarily  due  to  the  increase  in  the  number  of   properties   purchased,
rehabilitated and sold.

     Compensation  and benefits  increased  $1.1 million or 25%, to $5.6 million
for the six months  ended  June 30,  1999 from $4.5  million  for the six months
ended June 30,1998.  This increase was primarily due to increased sales salaries
and commission, which are based substantially on mortgage loan originations.

         Interest expense decreased $0.2 million, or 7%, to $2.2 million for the
six months  ended June 30, 1999 from $2.4  million for the six months ended June
30, 1998. This decrease was  attributable  to the decrease in subprime  mortgage
originations funded through the Company's warehouse lines of credit.

     Other general and administrative expense increased $0.7 million, or 42%, to
$2.4  million for the six months  ended June 30, 1999 from $1.7  million for the
six months ended June 30, 1998.  This  increase was  primarily  due to increased
expenses incurred in connection with the growth in the operations of the Company
including rent and facilities expense, telephone and marketing.

         Although there can be no assurance  thereof,  the Company believes that
the  expected   increase  in  mortgage   origination   volume  and   residential
rehabilitation activities will result in increased expenses.

     Net income  decreased $0.1 million or 10% to $1.0 million from $1.1 million
for the six months ended June 30, 1999.

     Liquidity and Capital Resources

     The Company's  principal  financing needs consist of funding  mortgage loan
originations and residential rehabilitation properties. To meet these needs, the
Company  currently relies on borrowings under warehouse lines of credit and cash
flow from operations. The amount of outstanding borrowings under warehouse lines
of credit at June 30, 1999 was $59.6 million. The mortgage loans and residential
rehabilitation properties, funded with the proceeds from such borrowings, secure
warehouse lines of credit.

     On August  7,  1998,  the  Company  entered  into a Senior  Secured  Credit
Agreement  with  Chase  Bank of Texas,  National  Association  and PNC Bank (the
"Warehouse  Line").  The Warehouse  Line provides a warehouse  line of credit of
$120  million  ($90  million  committed  at August  11,  1998) for its  mortgage
originations  and residential  rehabilitation  purchases.  The Warehouse Line is
secured by the mortgage loans and residential  rehabilitation  purchases  funded
with the proceeds of such borrowings.  The Company has also pledged the stock of
its residential rehabilitation subsidiaries as additional collateral. Borrowings
for  residential  rehabilitation  purchases are  guaranteed  by Ronald  Friedman
(President,  Chief  Executive  Officer and a Director of the Company) and Robert
Friedman (Chairman of the Board of Directors, Chief Operating Officer, Secretary
and Treasurer of the Company).  The interest rate charged for  borrowings  under
the  Warehouse  Line is LIBOR plus 1 1/4%-2 1/4  depending  upon the  collateral
type. The Warehouse Line expires on October 5, 1999.

     The  warehouse  lines  of  credit  contains  certain   covenants   limiting
indebtedness,  liens,  mergers,  changes  in  control  and sales of  assets  and
requires the Company to maintain  minimum net worth and other financial  ratios.
The Company  expects to be able to renew or replace the  Warehouse  Line and its
other warehouse line of credit when the current terms expire.

     On February 18, 1998 the Company  completed an initial  public  offering of
new shares of common  stock at a price of $9 per  share.  The  Company  received
gross proceeds of $11.3 million and net proceeds of approximately  $9.2 million.
The proceeds from this offering were used for funding mortgage  originations and
residential  rehabilitation  properties,  working  capital and an S  Corporation
distribution.

     Net cash substantially provided by operations for the six months ended June
30,  1999 was $36.5  million.  The funds were  provided  by a $21.8  million net
decrease in mortgage  loans held for sale,  and a $14.2  million net decrease in
receivable  from sales of loans.  These funds were used to finance a decrease in
warehouse  borrowings of $35.1 million and decreases in loans to affiliates  and
distributions payable to stockholders.


     Impact of New Accounting Standards

     In June 1998, the Financial  Accounting  Standards  Board  ("FASB")  issued
Statement of Financial  Accounting  Standards ("SFAS") No. 133,  "Accounting for
Derivative  Instruments  and  Hedging  Activities."  SFAS No. 133 applies to all
entities and is effective for fiscal  quarters of fiscal years  beginning  after
June 15, 2000. This statement establishes  accounting and auditing standards for
derivative  instruments,  including certain derivative  instruments  embedded in
other  contracts and for hedging  activities.  This  statement  requires that an
entity  recognize  all  derivatives  as  either  assets  or  liabilities  in the
statement of financial position and measure those instruments at fair value. The
company  does not expect  any  material  impact to its  financial  condition  or
results of operations upon its adoption of SFAS No. 133.

     In  October  1998,   the  FASB  issued  SFAS  No.  134,   "Accounting   for
Mortgage-Backed Securities Held for Sale by a Mortgage Banking Enterprise". SFAS
No. 134 conforms the accounting for securities retained after  securitization of
mortgage  loans  by a  mortgage  banking  enterprise  with  the  accounting  for
securities  retained  after  the  securizitation  of other  types of assets by a
non-mortgage banking enterprise. SFAS No. 134 is effective for the first quarter
beginning  after  December  31,  1998.  Management  of the Company  believes the
implementation  of SFAS No. 134 will not have a material impact on the Company's
financial condition or results of operations.

     Year 2000 Compliance

     The  Company is  currently  in the  process  of  updating  its  information
technology  infrastructure for the Year 2000 ("Y2000")  compliance.  The Company
has contacted the venders of its information  systems and has been informed that
these systems are Y2000  compliant.  The  Company's  existing  workstations  and
fileservers are  substantially  Y2000 compliant and those  workstations that are
not Y2000  compliant will be replaced  during 1999. The Company does not believe
that the cost to modify its information technology infrastructure to be material
to its  financial  condition  or  results  of  operations  nor does the  Company
anticipate any material disruption of its operations as a result of a failure by
the Company to be Compliant.  However, there can be no assurance that there will
not be a delay in, or increased costs, associated with the need to address Y2000
issues.  The Company also relies,  directly and  indirectly,  on the business of
other  entities,  such as third party service  providers,  creditors,  financial
institutions and government agencies. Even if the Company's computer systems are
not materially  adversely  affected by Y2000 issues,  the Company's business and
operations  could  me  materially  adversely  affected  by  disruptions  in  the
operations of other entities with which the Company interacts.



<PAGE>


     PART II-OTHER INFORMATION


     Item 1. Legal Proceedings

     The Registrant is a defendant in certain  litigation  arising in the normal
course  of  its  business.  In the  opinion  of the  Registrant,  any  potential
liability  with respect to such legal actions will not,  individually  or in the
aggregate,  be material to the  Registrant's  financial  position,  liquidity or
future results of operations.

     Item 2. Changes in Securities and Use of Proceeds

     None.

     Item 3. Defaults Upon Senior Securities

     None.

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

     None.

     Item 5. Other Information

     None.

     Item 6. Exhibits and Reports on Form 8-K

     (a) Exhibits

          Ex-27 Financial Data Schedule




<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.


                                          PMCC FINANCIAL CORP.
                                          (Registrant)



                                        By /s/ Ronald Friedman
                                           -------------------
                                           Ronald Friedman
                                           President and Chief Executive Officer


                                        By /s/ Robert Friedman
                                           --------------------
                                           Robert Friedman
                                           Chief Financial Officer
                                           (Principal Accounting Officer)

Dated: August 16, 1999