-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, MifdBDbU3zdftp+/0qUzvmuBqlxZkR2sXdzSfHgQqYaCsYCr01UgLFas4uSY6Bu/ gZgKO+Bmu+syooUutLQtOg== 0000950123-96-006254.txt : 19961108 0000950123-96-006254.hdr.sgml : 19961108 ACCESSION NUMBER: 0000950123-96-006254 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960930 FILED AS OF DATE: 19961107 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: BEVERLY HILLS BANCORP CENTRAL INDEX KEY: 0000011917 STANDARD INDUSTRIAL CLASSIFICATION: STATE COMMERCIAL BANKS [6022] IRS NUMBER: 952588374 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-04559 FILM NUMBER: 96655743 BUSINESS ADDRESS: STREET 1: 100 WILSHIRE BLVD STE 1940 CITY: SANTA MONICA STATE: CA ZIP: 90401 BUSINESS PHONE: 3103957754 MAIL ADDRESS: STREET 1: 100 WILSHIRE BLVD CITY: SANTA MONICA STATE: CA ZIP: 90401 10QSB 1 10QSB 1 SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-QSB [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR QUARTER ENDED SEPTEMBER 30, 1996 [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the period from __________ to __________ Commission File Number 0-4559 _____________________________ BEVERLY HILLS BANCORP ______________________________________________________ (Exact name of registrant as specified in its charter) CALIFORNIA 95-2588374 ________________________ _______________________________________ (State of Incorporation) (I.R.S. Employer Identification Number) 100 WILSHIRE BOULEVARD, SUITE 1940, SANTA MONICA, CA 90401 ____________________________________________________ __________ (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: 310-395-7754 ________________ 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 of Common Stock, $1.00 par value, outstanding as of September 30, 1996: 1,194,432. 2 BEVERLY HILLS BANCORP TABLE OF CONTENTS
Page PART I. Financial Information Number --------------------- ------ Item 1. Financial Statements Condensed Financial Statements 3-4 Condensed Statement of Net Assets in Liquidation at September 30, 1996 5 Condensed Statements of Changes in Net Assets in Liquidation for the three and nine months ended September 30, 1995 6 Condensed Statements of Cash Flows for the nine months ended September 30, 1996 and 1995 7 Notes to Condensed Financial Statements 8-10 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 11-12 PART II. Other Information Item 1. Legal Proceedings 13 Item 6. Exhibits and Reports on Form 8-K 13 SIGNATURE 13
- 2 - 3 PART I. Financial Information Item 1. Beverly Hills Bancorp -- Financial Statements Condensed Financial Statements (Unaudited) The Condensed Financial Statements included herein have been prepared by Beverly Hills Bancorp (the "Company"), without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Company believes the disclosures which are made are adequate to make the information presented not misleading. Further, the Condensed Financial Statements have been prepared in accordance with generally accepted accounting principles for interim financial information, the instructions to Form 10-QSB and Regulation S-B (including Item 310(b) thereof) and reflect, in the opinion of management, all adjustments necessary to present fairly the net assets and results of operations as of and for the periods indicated. It is suggested that these Condensed Financial Statements be read in conjunction with the Financial Statements and the Notes thereto for the year ended December 31, 1995, included in the Beverly Hills Bancorp Form 10-KSB Annual Report to the Securities and Exchange Commission. The Company has adopted the liquidation basis of accounting as of September 30, 1995. This basis of accounting is considered appropriate when the Company has adopted a Plan of Complete Liquidation and Dissolution (the "Plan") and liquidation appears imminent, the Company is no longer viewed as a going concern and the net realizable value of the Company's assets are reasonably determinable. Under this basis of accounting, assets and liabilities are stated at their estimated net realizable value and estimated costs of liquidating the Company are provided to the extent they are reasonably determinable. The Plan provides for the liquidation of all of the Company's assets. In connection with the adoption of the liquidation basis of accounting, the Company has accrued what management believes are reasonable estimates of realizable value and costs to liquidate its remaining assets. The actual realizable value and costs may differ significantly depending on a number of factors, including the length of time it takes to dispose of and the amount received for the remaining assets and the holding costs associated therewith. Estimated costs to liquidate are reflected in the Statement of Net Assets as "Reserve for Remaining Lease Obligations" and "Reserve for Estimated Costs of Operation, Liquidation and Dissolution." The Condensed Financial Statements for the three and nine months ended September 30, 1996 and 1995 were prepared on the liquidation basis of accounting. - 3 - 4 The effects of adopting the Plan are explained in Note 2 - Plan of Complete Liquidation and Dissolution. The Condensed Financial Statements for the three and nine months ended September 30, 1996 are not necessarily indicative of results to be expected for the entire year ending December 31, 1996. See Item 2 - "Management's Discussion and Analysis of Financial Condition and Results of Operations." - 4 - 5 BEVERLY HILLS BANCORP CONDENSED STATEMENT OF NET ASSETS IN LIQUIDATION (UNAUDITED) SEPTEMBER 30, 1996 ASSETS Cash and Cash Equivalents $1,735,000 Other Assets 25,000 ---------- Total Assets 1,760,000 ---------- LIABILITIES Reserve for Estimated Costs of Operation, Liquidation and Dissolution 234,000 Reserve for Remaining Lease Obligations 36,000 Other Liabilities 35,000 ---------- Total Liabilities 305,000 ---------- Net Assets in Liquidation $1,455,000 ========== Number of Common Shares Outstanding 1,194,432 ========== Net Assets in Liquidation Per Share $ 1.22 ==========
See Accompanying Notes to Condensed Financial Statements. - 5 - 6 BEVERLY HILLS BANCORP CONDENSED STATEMENTS OF CHANGES IN NET ASSETS IN LIQUIDATION (UNAUDITED)
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1995 ---------------------------- THREE MONTHS NINE MONTHS ------------ ----------- Income: Interest, Dividend and Other $ 33,000 $ 130,000 Equity in Loss of Investment (2,000) (24,000) Forfeited Deposit 100,000 100,000 ----------- ----------- Total Income 131,000 206,000 ----------- ----------- Operating Expenses: General and Administrative 94,000 309,000 Amortization of Excess Cost of Investment 44,000 131,000 ----------- ----------- Total Expenses 138,000 440,000 ----------- ----------- Loss Before Minority Interests and Effects of Liquidation (7,000) (234,000) Minority Interests in Subsidiaries' Losses 1,000 3,000 ----------- ----------- Loss Before Effects of Liquidation (6,000) (231,000) Effects of Liquidation 643,000 643,000 ----------- ----------- Net Income $ 637,000 $ 412,000 =========== =========== Net Income Per Share $ .53 $ .35 =========== =========== Weighted Average Number of Common Shares Outstanding 1,194,432 1,194,432 =========== ===========
See Accompanying Notes to Condensed Financial Statements. - 6 - 7 BEVERLY HILLS BANCORP CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, ---------------------------- 1996 1995 ----------- ----------- Cash Flows from Operating Activities: Net Income $ -- $ 412,000 Adjustments to Reconcile Net Income to Net Cash Used in Operating Activities: Equity in Loss of Investment -- 24,000 Amortization of Excess Cost of Investment -- 131,000 Minority Interest in Subsidiaries' Losses -- (3,000) Effects of Liquidation -- (643,000) Change in Assets and Liabilities: Decrease in Investments 726,000 -- Decrease in Notes and Interest Receivable 166,000 -- Increase in Other Assets (25,000) -- Decrease in Accounts Payable and Accrued Liabilities (54,000) (16,000) Decrease in Reserve for Remaining Lease Obligations (36,000) -- Increase in Reserve for Estimated Costs of Operation, Liquidation and Dissolution 17,000 -- Increase in Other Liabilities 35,000 -- Change in Presentation of Minority Interest in Subsidiaries -- (1,039,00) Payment under Plan of Complete Liquidation and Dissolution (4,180,000) -- ----------- ----------- Net Cash Used in Operating Activities and Net Decrease in Cash and Cash Equivalents (3,351,000) (1,134,000) ----------- ----------- Cash and Cash Equivalents at Beginning of Period 5,086,000 1,744,000 ----------- ----------- Cash and Cash Equivalents at End of Period $ 1,735,000 $ 610,000 =========== ===========
See Accompanying Notes to Condensed Financial Statements. - 7 - 8 BEVERLY HILLS BANCORP NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED) SEPTEMBER 30, 1996 Note 1 - Basis of Presentation: The Condensed Financial Statements included herein have been prepared by Beverly Hills Bancorp (the "Company"), without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Company believes the disclosures which are made are adequate to make the information presented not misleading. Further, the Condensed Financial Statements have been prepared in accordance with generally accepted accounting principles for interim financial information, the instructions to Form 10-QSB and Regulation S-B (including Item 310(b) thereof) and reflect, in the opinion of management, all adjustments necessary to present fairly the net assets and results of operations as of and for the periods indicated. It is suggested that these Condensed Financial Statements be read in conjunction with the Financial Statements and the Notes thereto for the year ended December 31, 1995, included in the Beverly Hills Bancorp Form 10-KSB Annual Report to the Securities and Exchange Commission. The Company has adopted the liquidation basis of accounting as of September 30, 1995. This basis of accounting is considered appropriate when the Company has adopted a Plan of Complete Liquidation and Dissolution (the "Plan") and liquidation appears imminent, the Company is no longer viewed as a going concern and the net realizable value of the Company's assets are reasonably determinable. Under this basis of accounting, assets and liabilities are stated at their estimated net realizable value and estimated costs of liquidating the Company are provided to the extent they are reasonably determinable. The Plan provides for the liquidation of all of the Company's assets. In connection with the adoption of the liquidation basis of accounting, the Company has accrued what management believes are reasonable estimates of realizable value and costs to liquidate its remaining assets. The actual realizable value and costs may differ significantly depending on a number of factors, including the length of time it takes to dispose of and the amount received for the remaining assets and the holding costs associated therewith. Estimated costs to liquidate are reflected in the Statement of Net Assets as "Reserve for Remaining Lease Obligations" and "Reserve for Estimated Costs of Operation, Liquidation and Dissolution." The Condensed Financial Statements for the three and nine months ended September 30, 1996 and 1995 were prepared on the liquidation basis of accounting. The - 8 - 9 effects of adopting the Plan are explained in Note 2 - Plan of Complete Liquidation and Dissolution. Use of Estimates: The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. There were no changes in the estimates for the three and nine months ended September 30, 1996. Reclassification: Certain prior years' amounts have been reclassified to conform to the current year presentation. Note 2 - Plan of Complete Liquidation and Dissolution: Estimated Effects of Liquidation: The net adjustment at September 30, 1995 required to convert from the going concern (historical cost) basis to the liquidation basis of accounting was an increase in the carrying value of net assets of $643,000 which was included in the Statement of Net Assets and of Changes in Net Assets. This increase is a result of recording estimated realizable values and costs, which costs may be subject to change as facts and circumstances change, as follows: 1. Increase in valuation of Investment in Tigera Group, Inc. ("Tigera") to realizable value of $.90 per share $ 995,000(A) 2. Reserve for Remaining Lease Obligation (80,000) 3. Reserve for Estimated Costs of Operations, Liquidation and Dissolution (272,000) --------- Estimated Effects of Liquidation $ 643,000 =========
-------------------- (A) The increase in valuation of the Tigera shares is based on the sale of such shares on November 8, 1995. The Company, as part of the Plan of Complete Liquidation and Dissolution discussed in the Proxy Statement dated April 14, 1995, made a payment of $3.50 per share of common stock outstanding on April 30, 1996, to shareholders of record as of April 16, 1996. - 9 - 10 It is anticipated that the Company will make a final payment during the first quarter of 1997. Note 3 - Net Income per Share: Net income per share is based on the weighted average number of common shares outstanding. Note 4 - Income Taxes: The Company files consolidated federal income and combined California franchise tax returns on a cash basis. As of December 31, 1995, the Company has net operating loss carryforwards of approximately $5,000,000 which are available to offset future taxable income expiring from 1997 through 2009. Examination by taxing authorities of open tax years could result in tax assessments and material changes to the net operating loss carryforwards. As a result of its reorganization, the Company is required to report income for financial statement purposes as if no tax loss carryforward existed. However, since the Company's tax status is not affected by the reorganization, it is entitled to a reduction of federal income taxes, except for personal holding taxes, arising from the utilization of its net operating losses incurred prior to reorganization. Such reduction is credited to capital surplus, when realized, rather than reflected in the income statement. Federal statutes place significant restrictions on the utilization of net operating loss deductions. Under present tax law, there is substantial risk that net operating loss carryforwards will be reduced if certain conditions are present in connection with an acquisition, merger or reorganization. As of December 31, 1995, the deferred tax assets related to the net operating loss carryforwards totaling approximately $2,000,000 have been fully offset by valuation allowances, since the utilization of such amounts is uncertain. Due to the Plan of Complete Liquidation and Dissolution, it is anticipated that the Company will not fully utilize these net operating loss carryforwards. - 10 - 11 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations September 30, 1996 Results of Operations Interest, dividend and other income were $33,000 and $130,000, respectively, for the three and nine months ended September 30, 1995, and consisted primarily of an interest payment of $67,375 from Sixty Eight Thousand, Inc. for the interest due on notes receivable for 1994 and the first nine months of 1995. The equity in loss of investment and amortization of excess cost of investment for the three and nine months ended September 30, 1995, relate to the Company's prior ownership of 22.5% of the outstanding shares of Tigera which had net losses of $7,000 and $106,000, respectively, for the three and nine months ended September 30, 1995. On July 10, 1995, the Company reached an agreement with A-Mark Financial Corporation ("A-Mark") under which A-Mark was to acquire all the issued and outstanding shares of the Company. The Company received a deposit of $100,000 from A-Mark, which deposit was to be forfeited if the tender offer with the terms set forth was not made or commenced within the time period stated. Simultaneously, the Company's shareholders adopted the Plan. On September 6, 1995, A-Mark stated that it would not go through with the purchase and, thereby, forfeited its deposit. General and administrative expenses were $94,000 and $309,000, respectively, for the three and nine months ended September 30, 1995. They consisted of day-to-day operational costs and professional fees in connection with the A-Mark agreement, sale of the Tigera shares and Plan of Complete Liquidation and Dissolution. The Company files consolidated federal income and combined California franchise tax returns on a cash basis. As of December 31, 1995, the Company has net operating loss carryforwards of approximately $5,000,000 which are available to offset future taxable income expiring from 1997 through 2009. Examination by taxing authorities of open tax years could result in tax assessments and material changes to the net operating loss carryforwards. As a result of its reorganization, the Company is required to report income for financial statement purposes as if no tax loss carryforward existed. However, since the Company's tax status is not affected by the reorganization, it is entitled to a reduction of federal income taxes, except for personal holding taxes, arising from the utilization of its net operating losses incurred prior to reorganization. Such reduction is credited to capital surplus, when realized, rather than reflected in the income statement. - 11 - 12 Federal statutes place significant restrictions on the utilization of net operating loss deductions. Under present tax law, there is substantial risk that net operating loss carryforwards will be reduced if certain conditions are present in connection with an acquisition, merger or reorganization. As of December 31, 1995, the deferred tax assets related to the net operating loss carryforwards totaling approximately $2,000,000 have been fully offset by valuation allowances, since the utilization of such amounts is uncertain. Due to the Plan of Complete Liquidation and Dissolution, it is anticipated that the Company will not fully utilize these net operating loss carryforwards. Liquidity and Capital Resources Cash and cash equivalents decreased to $1,735,000 as of September 30, 1996, compared with $5,086,000 as of December 31, 1995. The decrease is attributable to payments for various liabilities and the payment under the Plan of Complete Liquidation and Dissolution which were partially offset by the receipt of interest income, the collection of notes and interest receivable and receipts regarding the sale of the Company's investments. As of September 30, 1996, the Company's principal source of funds consisted of $1,735,000 in cash and cash equivalents. Near-term capital requirements for the payment of liabilities and liquidating dividends are expected to be financed through cash flow from interest income and existing cash balances. The Company, as part of the Plan of Complete Liquidation and Dissolution discussed in the Proxy Statement dated April 14, 1995, made a payment of $3.50 per share of common stock outstanding on April 30, 1996, to shareholders of record as of April 16, 1996. It is anticipated that the Company will make a final payment during the first quarter of 1997. - 12 - 13 PART II. Other Information Item 1. Legal Proceedings None. Item 6. Exhibits and Reports on Form 8-K (a) Exhibits: None. (b) Report on Form 8-K: None. SIGNATURE 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. BEVERLY HILLS BANCORP (Registrant) By: /s/ Albert M. Zlotnick ________________________________________ Albert M. Zlotnick Chairman of the Board, President and Chief Executive, Financial and Accounting Officer Dated: November 6, 1996 - 13 - EX-27 2 FINANCIAL DATA SCHEDULE
5 9-MOS DEC-31-1996 JAN-01-1996 SEP-30-1996 1,735,000 0 0 0 0 0 0 0 1,760,000 305,000 0 0 0 0 1,455,000 1,760,000 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
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