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UNITED STATES

Form 10-K

þ      ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)

For the Fiscal Year Ended December 31, 2003

Commission File Number 1-8007

Fremont General Corporation

Registrant’s Telephone Number, including Area Code:

Securities Registered Pursuant to Section 12(b) of the Act:

Common Stock, $1.00 par value

New York Stock Exchange

     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 þ          No o

      Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.     o

      Indicate by check mark whether the registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2).     Yes þ          No o

      The aggregate market value of the voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold as of the last business day of the Registrant’s most recently completed second fiscal quarter, June 30, 2003:

Common Stock, $1.00 Par Value — $705,578,000

      The number of shares outstanding of each of the issuer’s classes of common stock as of February 27, 2004:

Common Stock, $1.00 Par Value — 75,991,000 Shares

DOCUMENTS INCORPORATED BY REFERENCE:

      Portions of the proxy statement for the 2004 annual meeting of stockholders are incorporated by reference into Part III of this report.

FREMONT GENERAL CORPORATION

ANNUAL REPORT ON FORM 10-K

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PART I

      This report may contain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements and the currently reported results are based upon the current expectations and beliefs of Fremont General Corporation (“Fremont”) and its subsidiaries (combined “the Company”) concerning future developments and their potential effects upon the Company. These statements and the Company’s results reported herein are not guarantees of future performance or results and there can be no assurance that actual developments and economic performance will be as anticipated by the Company. Actual developments and/or results may differ significantly and adversely from the Company’s expected or currently reported results as a result of significant risks, uncertainties and factors beyond the Company’s control (as well as the various assumptions utilized in determining the Company’s expectations) which include, but are not limited to, the following:

	•	the variability of general and specific economic conditions and trends, and changes in, and the level of, interest rates;
	•	the impact of competition and pricing environments on loan and deposit products and the resulting effect upon the Company’s net interest margin and net gain on sale;
	•	changes in the Company’s ability to originate loans, and any changes in the cost and volume of loans originated as a result thereof;
	•	the ability to access the necessary capital resources in a cost-effective manner to fund loan originations, the condition of the whole loan sale and securitization markets and the timing of sales and securitizations;
	•	the ability of the Company to sell or securitize the residential real estate loans it originates, the pricing of existing and future loans, and the net premiums realized upon the sale of such loans;
	•	the ability of the Company to sell certain of the commercial real estate loans and foreclosed real estate in its portfolio and the net proceeds realized upon the sale of such;
	•	the impact of changes in the commercial and residential real estate markets, and changes in the fair values of the Company’s assets and loans, including the value of the underlying real estate collateral;
	•	the ability to collect and realize the amounts outstanding, and the timing thereof, of loans and foreclosed real estate;
	•	the variability in determining the level of the allowance for loan losses and the fair value of the mortgage servicing rights and residual interests in securitizations;
	•	the effect of certain determinations or actions taken by, or the inability to secure regulatory approvals from, the Federal Deposit Insurance Corporation, the Department of Financial Institutions of the State of California or other regulatory bodies on various matters;
	•	the ability of the Company to maintain cash flow sufficient for it to meet its debt service and other obligations;
	•	the impact and cost of adverse state and federal legislation and regulations, litigation, court decisions and changes in the judicial climate;
	•	the ability of the Company to utilize the net operating loss carryforwards currently held and the impact of changes in federal and state tax laws and interpretations, including tax rate changes, and the effect of any adverse outcomes from the resolution of issues with taxing authorities;

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	•	other events, risks and uncertainties discussed elsewhere in this Form 10-K and from time to time in Fremont’s other reports, press releases and filings with the Securities and Exchange Commission.

      The Company undertakes no obligation to publicly update such forward-looking statements.

General

      Fremont General Corporation (“Fremont” or when combined with its subsidiaries, “the Company” ) is a financial services holding company. Fremont’s financial services operations are consolidated within Fremont General Credit Corporation (“FGCC”), which is engaged in commercial and residential (consumer) real estate lending nationwide through its California-chartered industrial bank subsidiary, Fremont Investment & Loan (“FIL”). Fremont’s operating strategy is to continue to grow its financial services business nationwide by focusing its resources on the development and expansion of profitable lending products and strong distribution channels, as well as on controlling expenses. The financial services operation is primarily funded through deposit accounts that are insured up to the maximum legal limit by the Federal Deposit Insurance Corporation (“FDIC”), and to a lesser extent, advances from the Federal Home Loan Bank (“FHLB”). Certain corporate revenues and expenses, comprised primarily of investment income, interest expense and certain general and administrative expenses, are not allocated by Fremont to FGCC or to the discontinued insurance operations.

      The reported consolidated assets and stockholders’ equity of the Company as of December 31, 2003 were $9.52 billion and $664.7 million, respectively. The Company reported income before taxes from continuing operations of $364.1 million and net income from continuing operations of $212.0 million for the year ended December 31, 2003. Additionally, the Company recognized an after-tax gain of $44.3 million on the reversal of the accrual for the potential cash contributions to the Company’s discontinued insurance operations in liquidation. Total net income for 2003 was $256.3 million.

      Fremont, a Nevada corporation, was incorporated in 1972. Its corporate office is located at 2020 Santa Monica Boulevard, Suite 600, Santa Monica, California 90404 and its phone number is (310) 315-5500. Fremont’s common stock is traded on the New York Stock Exchange under the symbol “FMT”. At December 31, 2003, the Company had approximately 1,800 employees, none of whom is represented by a collective bargaining agreement. The Company believes its relations with its employees are satisfactory. As of December 31, 2003, officers and directors of the Company, their families and the Company’s benefit plans beneficially owned approximately 33% of Fremont’s outstanding common stock.

Lending Activities

      The Company’s lending operations consist of:

	•	The wholesale origination of non-prime or sub-prime residential real estate loans on a nationwide basis which are primarily sold to third party investors on a servicing released basis, or, to a lesser extent, securitized or held in the Company’s loan portfolio.
	•	The origination of commercial real estate loans on a nationwide basis which are substantially all held in the Company’s loan portfolio.

      Lending is done primarily on a senior and secured basis and the Company seeks to minimize credit exposure through loan underwriting that is focused upon appropriate loan to collateral valuations and cash flow coverages. Loans are originated through independent loan brokers, the Company’s own marketing representatives and referrals from various financial intermediaries and financial institutions.

      The outstanding loan portfolio has grown from $3.47 billion at December 31, 2000 to $4.79 billion at December 31, 2003. In addition, there were residential real estate loans held for sale of $3.65 billion at December 31, 2003. The Company’s financial services operation earned $429.1 million, $234.4 million and $138.5 million in income before taxes for the years ended December 31, 2003, 2002 and 2001, respectively, on revenues (interest income and non-interest income) of $901.9 million, $638.7 million and $512.0 million for the same respective periods.

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      The Company’s financial services loan portfolio, as well as the amounts of loans held for sale (which are all residential real estate loans), as of the dates indicated, are summarized in the following table by loan type.

      The commercial real estate lending operation, as of December 31, 2003, consists of 553 loans in its loan portfolio. The Company originates commercial real estate loans nationwide through its nine regional production offices. Loan origination is primarily through independent loan brokers and, to a lesser degree, directly through its own marketing representatives. The products and capabilities of the commercial real estate lending operation are marketed through the use of trade advertising, direct marketing, newsletters and trade show attendance and sponsorship. The emphasis is on service oriented delivery highlighted by responsiveness and reliability. Loan structures are tailored to meet the needs and risk profiles of individual transactions. The commercial real estate lending philosophy is collateral focused with emphasis on selecting properties that generate stable or increasing income cash flow streams, have strong asset quality and proven sponsorship with defined business plans. Loan structures, particularly in the case of bridge loans, include hold backs for such items as funding of all renovation costs, tenant improvements, leasing commissions and interest carry until property stabilization. For some of the loans in the portfolio, the Company has received guarantees of project completion and debt service from the sponsoring entity. The commercial real estate loans originated are generally held for the Company’s own portfolio. Commercial real estate loans are reported net of participations to other financial institutions or investors in the amount of $78.3 million and $93.2 million as of December 31,

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      The commercial real estate loan portfolio is primarily secured by first mortgages on properties in California (38.9%) and, to a lesser degree, New York (12.7%), Illinois (8.4%), Texas (5.8%), Florida (5.5%) and the District of Columbia (5.0%). Loans were originated in 19 different states during 2003. The real estate securing these loans includes a wide variety of property types including office, retail, lodging, industrial, multi-family and mixed-use properties. The loans in the portfolio were distributed by property type as follows as of the dates indicated:

      Loans include short-term bridge facilities for the renovation and lease-up of existing properties, as well as permanent loans which generally have terms for up to five years. Loans also include construction loans, which are loans for the construction of new structures, and also for additions or alterations to existing structures that prohibit occupancy or generation of rental revenue of the property during the construction period. Loans also include longer term single tenant credit loans, however, origination of these loans substantially ceased during the first quarter of 2000. Bridge loans generally are interest-only for up to two year terms. Principal amortization for permanent loans is generally up to 25 years. Approximately 41% of the commercial real estate loan balances outstanding are bridge loans, 32% are permanent loans, 20% are construction loans and 7% are single tenant credit loans. The majority of the commercial real estate loans originated are adjustable interest rate loans based upon six-month LIBOR and an applicable margin, and generally range in loan size between

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      The commercial real estate loan portfolio contains eight individual loans with outstanding balances in excess of $40 million as of December 31, 2003, the largest individual loan having an outstanding balance of $68.7 million; there were two loans, with a combined balance outstanding of $76.4 million at December 31, 2003, which were cross-collateralized and cross-defaulted. The largest commitment to an individual borrower as of December 31, 2003 was $109.5 million; this represents the maximum loan amount to the borrower. As of December 31, 2003, the portfolio had three concentrations by common investor or sponsor base that were in excess of $75 million in loan principal outstanding. The largest concentration is from one affiliated investment fund and totals $121.2 million, comprised of four separate loans. All four of the loans under this concentration were performing as of December 31, 2003.

      As of December 31, 2003, the average loan size was $7.3 million and the average loan-to-value ratio was 75.2%, using the most current available appraised values and current loan balances outstanding. At December 31, 2003, 14 commercial real estate loans were classified as non-accrual, totaling $71.8 million, and there were nine commercial real estate properties owned, totaling $23.6 million, which were acquired through or in lieu of foreclosure on loans. At December 31, 2003, there were five commercial real estate loans totaling $36.4 million that were 90 days or greater past due, but on accrual status; these include loans that are contractually past maturity, but continue to make interest payments.

      Substantially all of the residential real estate loans are secured by first deeds of trust. These loans generally have principal amounts below $500,000, have maturities generally of thirty years and are underwritten in accordance with lending policies that include standards covering, among other things, collateral value, loan to value and the customer’s debt ratio and credit score. These loans generally are “hybrid” loans which have a fixed rate of interest for an initial period after origination, typically two to three years, after which the interest rate will be adjusted to a rate equal to the sum of six-month LIBOR and a margin as set forth in the mortgage note. This interest rate will then be adjusted at each six-month interval thereafter, subject to various lifetime and periodic rate caps and floors. Our residential loans are generally made to borrowers who do not satisfy the credit, documentation or other underwriting standards prescribed by conventional mortgage lenders and loan buyers, such as Fannie Mae (Federal National Mortgage Association) and Freddie Mac (Federal Home Loan Mortgage Corporation) and are commonly known as “sub-prime”. Our borrowers generally have considerable equity in the properties securing their loans, but have impaired or limited credit profiles or higher debt-to-income ratios than traditional mortgage lenders allow. Our borrowers also include individuals who, due to self-employment or other circumstances, have difficulty verifying their income through conventional means. To mitigate the higher potential for credit losses that accompanies these types of borrowers, the Company attempts to maintain underwriting standards that require more appropriate loan to collateral valuations. Residential real estate loans are originated nationwide through

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      Origination volume increased approximately 98% to $13.74 billion in 2003 from $6.94 billion in 2002. Loans were originated in 45 different states during 2003, with the largest volume being originated in California (42.3%), New York (9.5%) and Florida (8.5%). The growth in loan originations during 2003 was the result of further penetration of existing markets and the overall growth in the national sub-prime lending market, which was positively impacted by a lower interest rate environment. The following table profiles the loan origination volume for the periods indicated:

      The residential real estate loan disposition strategy is primarily dependent upon market conditions and pricing, and may include whole loan sales, retaining loans in portfolio, or securitization. During 2003, $11.1 billion in residential real estate loans were sold in whole loan sales to other financial institutions or

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