-----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, OT0Ceh9WheSbN6PCmm/gXD92GYevvtTtZBKGq+Wq0EZRn1l+Fs3CQy+cyCO7Zs2E 93CZ+1z8tCGNP01vEek9nQ== 0000914317-98-000113.txt : 20010123 0000914317-98-000113.hdr.sgml : 20010123 ACCESSION NUMBER: 0000914317-98-000113 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19971231 FILED AS OF DATE: 19980213 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: 98537900 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 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 December 31, 1997 [ ] 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) 1000 Lafayette Boulevard, Bridgeport, Connecticut 06604 - - - - - - - - - - - - - - -------------------------------------------------------------------------------- (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 ] Item 1. Financial Statements
THE FIRST CONNECTICUT CAPITAL CORPORATION BALANCE SHEET, DECEMBER 31, 1997 (Dollars in thousands,except per share data) (Unaudited) ASSETS Investments: Loans - net .................................................. $ 464 ------- Investments-net ........................................ 464 ------- Cash and cash equivalents .................................... 176 Restricted cash .............................................. 279 Loans held for sale .......................................... 161 Accrued interest ............................................. 32 Servicing rights ............................................. 27 Fixed assets ................................................. 37 Notes Receivable ............................................. 471 Other assets ................................................. 29 ------- TOTAL ASSETS ................................................. $ 1,676 ======= LIABILITIES AND STOCKHOLDERS' EQUITY LIABILITIES: Accounts payable and other accrued expenses .................. 635 ------- TOTAL LIABILITIES ............................................ 635 ------- Commitments and contingencies (Note B) 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 Paid-in surplus .............................................. 9,253 Accumulated deficit .......................................... (8,799) ------- TOTAL STOCKHOLDERS' EQUITY ................................... 1,041 ------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY ................... $ 1,676 =======
See notes to financial statements.
THE FIRST CONNECTICUT CAPITAL CORPORATION STATEMENTS OF OPERATIONS FOR THE THREE AND NINE MONTHS ENDED DECEMBER 31, 1997 AND 1996 (Dollars in thousands, except per share data) (Unaudited) Three Months Three Months Nine Months Nine Months Ended Ended Ended Ended Dec. 31, 1997 Dec. 31, 1996 Dec. 31, 1997 Dec. 31, 1996 ---------- ----------- ----------- ---------- INTEREST INCOME: Interest and fees on loans $ 23 $ 27 $ 74 $ 76 ---------- ----------- ----------- ---------- RECOVERY OF INVESTMENT LOSSES 0 0 205 0 ---------- ----------- ----------- ---------- NET INTEREST INCOME AFTER RECOVERY OF INVESTMENT LOSSES 23 27 279 76 ---------- ----------- ----------- ---------- OTHER OPERATING INCOME: Servicing fees 27 42 101 123 Loan Orgination fees 60 52 111 165 Other fees 10 6 13 10 ---------- ----------- ----------- ---------- Total Other Operating Income 97 100 225 298 ---------- ----------- ----------- ---------- TOTAL INCOME 120 127 504 374 ---------- ----------- ----------- ---------- OTHER OPERATING EXPENSES: Amortization of servicing rights 0 36 0 73 Collection expenses 1 3 0 2 Officers' salaries 26 42 103 130 Other salaries 19 30 28 100 Directors' fees 0 5 9 14 Professional services 5 5 24 4 Miscellaneous taxes 3 5 15 23 Employee and general insurance 7 17 24 51 Rent 8 3 22 25 Communications 2 4 8 12 Advertising and promotions 1 1 4 4 Stock record and other financial expenses 0 1 3 4 Employees' pension plan 5 2 7 4 Depreciation expense 4 6 11 17 Other operating expenses 15 35 41 94 ---------- ----------- ----------- ---------- Total Other Operating Expenses 96 195 299 557 ---------- ----------- ----------- ----------
THE FIRST CONNECTICUT CAPITAL CORPORATION STATEMENTS OF OPERATIONS FOR THE THREE AND NINE MONTHS ENDED DECEMBER 31, 1997 AND 1996 (Dollars in thousands, except per share data) (Unaudited) (continued) Three Months Three Months Nine Months Nine Months Ended Ended Ended Ended Dec. 31, 1997 Dec. 31, 1996 Dec. 31, 1997 Dec. 31, 1996 ---------- ----------- ----------- ---------- NET INCOME (LOSS) BEFORE LOAN LOSSES 24 (68) 205 (183) ---------- ----------- ----------- ---------- Loan Losses 0 0 156 5 Loss on Asset Management Agreement Transaction. Note C 44 0 54 0 ---------- ----------- ----------- ---------- NET (LOSS) $ 20 $ (68) $ (5) $ (188) ========== =========== ========== =========== (LOSS) PER COMMON SHARE $ (0.02) $ (0.06) $ (0.00) $ ( 0.16) ========== =========== ========== =========== Weighted average number of common shares outstanding 1,173,382 1,173,382 1,173,382 1,173,382 ========== =========== ========== ===========
See notes to financial statements.
THE FIRST CONNECTICUT CAPITAL CORPORATION STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY FOR THE NINE MONTHS ENDED DECEMBER 31, 1997 AND 1996 (Dollars in thousands) (Unaudited) Common Stock Total Number Of Paid-In Accumulated Stockholders' Shares Amount Surplus Deficit Equity --------- ---- ------ ------- ------ BALANCE, MARCH 31,1996 1,173,382 $587 $9,253 ($8,569) $1,271 Net Loss (188) (188) --------- ---- ------ ------- ------ BALANCE, DECEMBER 31,1996 1,173,382 $587 $9,253 ($8,757) $1,083 ========= ==== ====== ======= ====== BALANCE, MARCH 31,1997 1,173,382 $587 $9,253 ($8,794) $1,046 Net Profit (5) (5) --------- ---- ------ ------- ------ BALANCE, DECEMBER 31, 1997 1,173,382 $587 $9,253 ($8,799) $1,041 ========= ==== ====== ======= ======
See notes to financial statements.
THE FIRST CONNECTICUT CAPITAL CORPORATION STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS ENDED DECEMBER 31, 1997 AND 1996 (Dollars in thousands) (Unaudited) Nine Months Nine Months Ended Dec 31, Ended Dec 31, 1997 1996 ------- ------- OPERATING ACTIVITIES Net income (loss) .................................................... $ (5) ($ 188) Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Investment (gains) losses ........................................ (49) 5 Loss on Asset Management Agreement transaction Note C............. 54 Depreciation ..................................................... 11 17 Decrease in servicing rights ..................................... 311 73 Increase in notes receivable ..................................... (471) 0 Orgination of loans held for sale ................................ (4,979) (1,857) Proceeds from sale of loans held for sale ........................ 5,198 1,629 Decrease( Increase) in accrued interest receivable ............... 8 (12) Decrease (Increase) in other assets .............................. 216 (25) Decrease (Increase) in accounts payable and other accrued expenses 151 (79) Increase in restricted cash ...................................... (234) 0 ------- ------- Net cash provided by (used in) operating activities ......... 211 (437) ------- ------- INVESTING ACTIVITIES Principal collected on investments ................................... 71 12 ------- ------- Net cash provided by investing activities ................... 71 12 ------- ------- FINANCING ACTIVITIES (Decrease) increase in warehouse line of credit ...................... (317) 145 ------- ------- DECREASE IN CASH AND CASH EQUIVALENTS ................................... (35) (280) CASH AND CASH EQUIVALENTS, BEGINNING .................................... 211 430 ------- ------- CASH AND CASH EQUIVALENTS, ENDING ....................................... $ 176 $ 150 ======= =======
See notes to financial statements. 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 The First Connecticut Small Business Investment Company, have been prepared in accordance with generally accepted accounting principles 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 footnotes required by generally accepted accounting principles 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, 1998. For further information, refer to the financial statements and footnotes thereto included in the Corporation's annual report filed on Form 10-KSB for the year ended March 31, 1997. NOTE B - COMMITMENTS AND CONTINGENCIES The Corporation is involved in litigation and administrative proceedings primarily arising in the normal course of its business. In the opinion of management, the Corporation's liability, if any, under any pending litigation or administrative proceeding would not materially affect its financial condition or results of operations. NOTE C - TERMINATION OF SERVICING RIGHTS On October 27 1997, Walsh Securities assigned the balance of the loan portfolio serviced by First Connecticut under the Asset Management Loan Servicing Agreement dated 12/15/93 (the "Agreement') to Greenwich Capital Financial Products, Inc. As a result of this transaction, the "Agreement" was terminated. Walsh Securities issued a promissory note dated November 12, 1997 in the amount of $560,000.00 to fulfill their obligation to First Connecticut under the "Agreement". Since the note is not interest bearing, interest has been imputed at 8.5% resulting in an original issue discount ("OID") of $471,000.00. This OID will be amortized to interest income over the life of the note. The discounted value of the note of $471,000.00 was exchanged for the amortized balance of the servicing rights of $311,000.00 and a receivable of $214,000.00 for the reimbursable fees and expenses resulting in a $54,000.00 net loss on the transaction. The note requires monthly payments of $10,000 beginning December 1, 1997 through December 1, 2000 with a lump sum payment of $200,000.00 on December 31, 2000. First Connecticut will continue to service the remaining loan portfolio for Greenwich Capital under a new servicing agreement. THE FIRST CONNECTICUT CAPITAL CORPORATION Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The Corporation had a net loss for the nine months ended December 31, 1997 of $5,000 compared to a net loss of $188,000 for the comparable period of the prior year. The Corporation is currently licensed in the States of Connecticut and Massachusetts to operate as Mortgage Lender/Broker. Interest Income and Other Operating Income Loan origination fees decreased $54,000 for the nine months ended December 31, 1997 as compared with the comparable period of the prior year. This decrease was due to the reduction of mortgage loans originated and sold in the secondary market. Total other operating income decreased by $73,000 from the prior year due to the decrease in loan originations and a decrease in loans serviced. First Connecticut has over reserved on a loan that has been liquidated, thus resulting in a gain of $49,000. Other Operating Expense Other operating expenses declined $258,000 during the nine months ended December 31, 1997 as compared to the comparable period of the prior year due primarily to decreases in officers and clerical salaries, amortization of servicing rights and an overall reduction in all operating expenses. Plan of Operation The Corporation is engaged in the mortgage banking business, which involves the origination, purchase, sale and servicing of mortgage loans secured by residential properties and other real estate. Since January 1996, the Corporation has expanded its portfolio Loan Program to include short-term mortgages for construction and remodeling. These loans are predominately secured by first mortgage liens on residential properties and are sold to qualified investors with orgination and servicing fees retained by the Corporation. It is anticipated that the Corporation will continue to increase its level of activities in these areas creating servicing fees and interest income. THE FIRST CONNECTICUT CAPITAL CORPORATION LIQUIDITY AND FINANCIAL CONDITION The Corporation has approximately $176,000 of unrestricted cash and cash equivalents and approximately $1,041 million of Stockholders' Equity at December 31, 1997. The Corporation currently anticipates that during the year ending March 31, 1998, its principal financing needs will consist of funding its mortgage loans held for sale and the ongoing net cost of mortgage loan originations and cash flow used in operations. 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 The Corporation continues to investigate and pursue alternative and supplementary methods to finance its operations and to support the growth of the Corporation The Corporation continues to monitor the cash on hand and the internally generated funds and believes it will be sufficient to meet its corporate, general and administrative working capital and other cash requirements during the year ending March 31, 1998. The Corporation also continues to decrease its cash flow requirements by monitoring all expenses. As a result of the Note with Walsh Securities this will increase the corporations cash flow by $120,000.00 a year. Management also believes additional steps can be taken if necessary. NEW OFFERING The Corporation has formed a Limited Partnership known as First Connecticut Capital Mortgage Fund A, Limited Partnership as to which the Corporation is the General Partner. The intent of this new entity is to sell units in the Limited Partnership to investors in a private placement, up to a maximum of $5 million in $50,000 units for the purpose of funding a short-term Portfolio Loan Program for the Limited Partnership. The limited partners will be limited to investors who qualify as "Accredited Investors" as defined in Regulation D, promulgated under the Securities Act of 1933. This program would generate income to the Corporation in the form of loan origination fees and servicing fees in excess of a guaranteed income return to the limited partners in connection with mortgage loans that would be made by the Limited Partnership from the funds invested by the limited partner. To date the Corporation has sold 25 units. A copy of the offering memo is available upon request. 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: February 13, 1998 By: /s/David Engelson ----------------- David Engelson President and Chief Financial Officer EX-27 2
5 1,000 9-MOS MAR-31-1998 DEC-31-1997 455 0 1,676 (491) 0 0 244 (208) 1,676 635 0 0 0 587 454 1,676 504 504 0 82 217 0 0 205 0 (210) 0 0 0 (5) 0.00 0.00
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