-----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, SHz2uYXRR3Ce+CgwXLlPwIpO/8u4KEpWNfWqxcfRUXrw+qggKtSCtdSpi4UoZaFa WNeheJBF/RaGPvfJ9uaxzg== 0000909012-00-000511.txt : 20010123 0000909012-00-000511.hdr.sgml : 20010123 ACCESSION NUMBER: 0000909012-00-000511 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000630 FILED AS OF DATE: 20000810 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FIRST CONNECTICUT CAPITAL CORP/NEW/ CENTRAL INDEX KEY: 0000730669 STANDARD INDUSTRIAL CLASSIFICATION: 6159 STATE OF INCORPORATION: CT FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 000-31080 FILM NUMBER: 690666 BUSINESS ADDRESS: STREET 1: 1000 LAFAYETTE BLVD STE 805 CITY: BRIDGEPORT STATE: CT ZIP: 06604 BUSINESS PHONE: 2033664726 MAIL ADDRESS: STREET 1: 1000 LAFAYETTE BLVD STREET 2: SUITE 805 CITY: BRIDGEPORT STATE: CT ZIP: 06604 10QSB 1 0001.txt QUARTERLY REPORT U. S. SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-QSB (Mark One) [X] QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2000 ------------- [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE EXCHANGE ACT For the transition period from _____________ to ______________ Commission file number 811-0969 -------- THE FIRST CONNECTICUT CAPITAL CORPORATION ----------------------------------------- (EXACT NAME OF SMALL BUSINESS ISSUER AS) (SPECIFIED IN ITS CHARTER) CONNECTICUT 06-0759497 - - - - - - - - - - - - - - ------------------------------------------------------------------------------- (STATE OR OTHER JURISDICTION (IRS EMPLOYER OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.) 1000 BRIDGEPORT AVENUE, SHELTON, CONNECTICUT 06484 -------------------------------------------------- (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (203) 944-5400 -------------- (ISSUER'S TELEPHONE NUMBER) ------------------------------------------------------ (FORMER NAME, FORMER ADDRESS AND FORMER FISCAL YEAR, IF CHANGED SINCE LAST REPORT) Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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 APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS ------------------------------------------- Check whether the registrant filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by court. Yes No ----- ----- APPLICABLE ONLY TO CORPORATE ISSUERS State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: 1,173,382 Transitional Small Business Format: Yes No X ----- ----- PART I - FINANCIAL INFORMATION ITEM 1. - Financial Statements
THE FIRST CONNECTICUT CAPITAL CORPORATION - - - - - - - - - - - - - - ----------------------------------------- BALANCE SHEETS, JUNE 30, 2000 (DOLLARS IN THOUSANDS, EXCEPT SHARE DATA) - - - - - - - - - - - - - - ----------------------------------------- (UNAUDITED) ASSETS 2000 - - - - - - - - - - - - - - ------ ---- Cash and cash equivalents $ 317 Restricted cash 43 Loans - net of allowance for loan losses of $45 1,536 Loans held for sale 609 Accrued interest receivable 7 Servicing rights 140 Fixed assets 13 Deferred income taxes 599 Other assets 40 ------- TOTAL ASSETS $ 3,304 ======= LIABILITIES AND STOCKHOLDERS' EQUITY - - - - - - - - - - - - - - ------------------------------------ LIABILITIES - - - - - - - - - - - - - - ----------- Line of credit $ 913 Accounts payable and other accrued expenses 17 ------- TOTAL LIABILITIES 930 ------- Commitments and contingencies STOCKHOLDERS' EQUITY: Common stock, no par value, stated value $.50 per share, authorized 3,000,000 shares, issued and outstanding 1,173,382 shares 587 Additional paid in capital 9,253 Accumulated deficit (7,466) ------- TOTAL STOCKHOLDERS' EQUITY 2,374 ------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 3,304 =======
See notes to condensed financial statements. 2
THE FIRST CONNECTICUT CAPITAL CORPORATION - - - - - - - - - - - - - - ----------------------------------------- STATEMENTS OF INCOME FOR THE THREE MONTHS ENDED JUNE 30, 2000 AND 1999 (DOLLARS IN THOUSANDS, EXCEPT SHARE DATA) - - - - - - - - - - - - - - ----------------------------------------- (UNAUDITED) - - - - - - - - - - - - - - ----------- 2000 1999 ---- ---- INTEREST INCOME: Interest and fees on loans $ 119 $ 149 ---------- ---------- INTEREST EXPENSE: Interest expense on line of credit 48 1 Other interest expense 5 9 ---------- ---------- TOTAL INTEREST EXPENSE 53 10 NET INTEREST INCOME 66 139 ---------- ---------- OTHER OPERATING INCOME: Servicing fees 85 28 Other fees 7 6 ---------- ---------- Total other operating income 92 34 ---------- ---------- TOTAL INCOME 158 173 ---------- ---------- OTHER OPERATING EXPENSES: Officers' salaries 36 29 Other salaries 9 8 Directors' fees 1 1 Professional services 7 11 Miscellaneous taxes 3 3 Employee and general insurance 11 8 Rent 8 7 Corporate insurance expenses 5 5 Licenses, dues and subscriptions expenses 1 2 Communications 2 3 Advertising and promotions 1 2 Stock record and other financial expenses 5 3 Depreciation 3 3 Equipment and auto rental 3 3 Postage expenses 1 1 Office supplies 1 2 Other 3 8 ---------- ---------- Total other operating expenses 100 99 ---------- ---------- INCOME BEFORE INCOME TAX BENEFIT 58 74 INCOME TAX BENEFIT 45 93 ---------- ---------- NET INCOME $ 103 $ 167 ========== ========== INCOME PER COMMON SHARE (BASIC AND DILUTED) $ 0.09 $ 0.14 ========== ========== Weighted average number of common shares outstanding (basic and diluted) 1,173,382 1,173,382 ========== ==========
See notes to condensed financial statements. 3
THE FIRST CONNECTICUT CAPITAL CORPORATION - - - - - - - - - - - - - - ----------------------------------------- STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY FOR THE THREE MONTHS ENDED JUNE 30, 2000 (DOLLARS IN THOUSANDS, EXCEPT SHARE DATA) - - - - - - - - - - - - - - ----------------------------------------- (UNAUDITED) - - - - - - - - - - - - - - ----------- COMMON STOCK ------------ TOTAL NUMBER OF ADDITIONAL ACCUMULATED STOCKHOLDERS' SHARES AMOUNT PAID - IN SURPLUS DEFICIT EQUITY --------- ------ ------------------ -------- ------------- BALANCE, April 1,2000 1,173,382 $587 $9,253 ($7,569) $2,271 Net Income 103 103 -------------- ---------- ------------ ---------------- --------------- BALANCE, June 30, 2000 1,173,382 $587 $9,253 ($7,466) $2,374 ============== ========== ============ ================ ===============
See notes to financial statements. 4
THE FIRST CONNECTICUT CAPITAL CORPORATION - - - - - - - - - - - - - - ----------------------------------------- STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED JUNE 30, 2000 AND 1999 (DOLLARS IN THOUSANDS) (UNAUDITED) 2000 1999 ---- ---- OPERATING ACTIVITIES Net income $ 103 $ 167 Adjustments to reconcile net income to net cash used in operating activities: Deferred taxes (45) (94) Depreciation 3 3 Interest accretion on note receivable -- (8) Origination of loans held for sale (3,296) (3,083) Proceeds from sales of loans held for sale 3,246 3,068 Increase in accrued interest receivable (1) (1) Decrease (increase) in other assets 4 (2) Decrease in accounts payable and other accrued expenses (28) (200) Increase in restricted cash (1) -- ------- ------- Net cash used in operating activities (15) (150) ------- ------- INVESTING ACTIVITIES Originations of loans -- (225) Principal collected on loans 810 6 ------- ------- Net cash provided by (used in) investing activities 810 (219) ------- ------- FINANCING ACTIVITIES (Decrease) increase in line of credit borrowings (805) 225 Principal collected on note receivable -- 20 Decrease in Partnership loans -- 30 ------- ------- Net cash (used in) provided by financing activities (805) 275 ------- ------- DECREASE IN CASH AND CASH EQUIVALENTS (10) (94) CASH AND CASH EQUIVALENTS, BEGINNING 327 385 ------- ------- CASH AND CASH EQUIVALENTS, ENDING $ 317 $ 291 ======= =======
See notes to condensed financial statements. 5 THE FIRST CONNECTICUT CAPITAL CORPORATION NOTES TO CONDENSED FINANCIAL STATEMENTS NOTE A - BASIS OF PRESENTATION The accompanying unaudited condensed financial statements of The First Connecticut Capital Corporation (the "Corporation"), formerly known as The First Connecticut Small Business Investment Company, have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") for interim financial information and with the instructions to Form 10-QSB and Article 10-01 of Regulation S-X. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair representation have been included. Operating results are not necessarily indicative of the results that may be expected for the year ending March 31, 2001. For further information, refer to the financial statements and notes thereto included in the Corporation's Annual Report on Form 10-KSB for the year ended March 31, 2000. Certain amounts in the 1999 financial statements have been reclassified to conform to the 2000 presentation. Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The Corporation is currently licensed in the state of Connecticut to operate as Mortgage Lender/Broker. The Corporation had net income of $103,000 for the three months ended June 30, 2000 compared to a net income of $167,000 for the three months ended June 30, 1999. The decrease of $64,000 is due primarily to an increase of $47,000 of interest paid on the Corporation's line of credit and a decrease in the income tax benefit of $48,000. INTEREST INCOME AND OTHER OPERATING INCOME - - - - - - - - - - - - - - ------------------------------------------ Interest and fees on loans decreased $30,000 for the three months ended June 30, 2000, as compared to the three months ended June 30, 1999. This decrease was primarily due to a decrease in the number of mortgage loans originated and funded by the Corporation. The Northeast in general experienced a slow down in housing starts for this quarter, which is attributed to higher interest rates. Management continues to conservatively underwrite new applications and will not lessen its standards in order to compensate for a slower real estate market. Inventory levels of unsold properties remains low and therefore management believes the future of the construction market will remain strong. Servicing fees increased by $57,000 for the three months ended June 30, 2000, as compared to the same period in the prior year. This increase is due to an increase in servicing fees earned on its short-term construction and remodeling mortgage loans and the Limited Partnership portfolios. 6 THE FIRST CONNECTICUT CAPITAL CORPORATION This increase is partially offset by the continued reduction and liquidation of the portfolio sold under the Loan and Real Property Purchase Agreement dated June 29, 1993 (and amended on October 29, 1993). Servicing fees generated by this portfolio will continue to decline as the portfolio continues to be liquidated in accordance with such Loan and Real Property Purchase Agreement. OTHER OPERATING EXPENSE - - - - - - - - - - - - - - ----------------------- Total other operating expenses increased by $1,000 during the three months ended June 30, 2000, as compared to the comparable period of the prior year. This increase is due to an increase in officers' salaries of $7,000 offset by a reduction in professional services and other expenses. Management believes that significant further reduction of other operating expenses will be difficult to achieve, based on the already extensive reductions that have already been effected. INCOME TAX BENEFIT - - - - - - - - - - - - - - ------------------ An income tax benefit of $45,000 was recorded for the three months ended June 30, 2000, as compared to $93,000 for the three months ended June 20, 1999, which primarily reflects the reduction of the valuation allowance against net operating loss carryforwards (NOLS), based on management's assessment of the amount of NOLS that more likely than not will be realized based on current and projected profitability. PLAN OF OPERATION - - - - - - - - - - - - - - ----------------- The Corporation is engaged in the mortgage banking business, which involves the origination, purchase, sale and servicing of mortgage loans collateralized by residential properties and other real estate. These loans are predominately collateralized by first mortgage liens on residential properties and are sold to qualified investors, with origination and servicing fees retained by the Corporation. The Corporation's revenues consist of loan servicing fees, loan origination fees, interest on mortgage loans and mortgage servicing rights. It is anticipated that based upon the favorable climate in the construction industry in Connecticut, the Corporation will continue to maintain its present level of activities in these area. Management is cognizant that residential construction is seasonal in nature, as well as sensitive to changing interest rates. As such, we have experienced slower loan demand during the first quarter. This trend is expected to continue through the next quarter as well. Management will continue to maintain its strict underwriting standards during this period of reduced loan demand. We will continue to seek other forms of short term lending products such as "bridge" financing, land loans, remodeling loans and small mixed use or commercial properties in order to increase loan demand while at the same time, exercising conservative and responsible underwriting standards. All of our products are underwritten pursuant to strict guidelines which include conservative loan to value ratios, minimum credit standards and feasible exit strategies. 7 THE FIRST CONNECTICUT CAPITAL CORPORATION LINE OF CREDIT - - - - - - - - - - - - - - -------------- The Corporation has a $2,000,000 Commercial Line of Credit with The Hudson United Bank expires December 7, 2000. This $2,000,000 line of credit is for a term of one year and interest is computed at 2.25% over the Wall Street Journal Prime Rate. This line is collateralized by an assignment of notes and mortgages equal to the amount of the loan. FINANCIAL RESOURCES - - - - - - - - - - - - - - ------------------- As of June 30, 2000, the Corporation had approximately $317,000 of unrestricted cash and cash equivalents and approximately $2.374 million of Stockholders' Equity. The Corporation currently anticipates that during the year ending March 31, 2001, its principal financing needs will consist of funding its mortgage loans held for sale and the ongoing net cost of mortgage loan originations. The Corporation believes that cash on hand, internally generated funds and availability of its line of credit will be sufficient to meet its corporate, general and administrative working capital and other cash requirements during the year ending March 31, 2001. Future cash flow requirements will depend primarily on the level of the Corporation's activities in originating and selling mortgage loans, as well as cash flow required by its operations. If construction loan demand increases, the Corporation will require additional cash to service those requirements. The Corporation continues to monitor its cash flow requirements, and, due to the aforementioned line of credit, the Corporation feels it will be able to meet these cash requirements. THE FIRST CONNECTICUT CAPITAL CORPORATION PART II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K NONE 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 duly authorized. THE FIRST CONNECTICUT CAPITAL CORPORATION (Registrant) Date: August 10, 2000 By:/s/ Lawrence R. Yurdin ------------------------- Lawrence R. Yurdin President 8 EX-27 2 0002.txt FINANCIAL DATA SCHEDULE
5 3-MOS MAR-31-2001 APR-01-2000 JUN-30-2000 360 0 2,976 (45) 0 0 48 (34) 3,304 929 0 0 0 587 1,787 3,304 158 158 0 0 101 0 0 57 45 0 0 0 0 103 0.09 0.09
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