-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, AMjEV/L7c9qGI39FTKkqxlvzciFAZlEdJbRHFVKrqeAtcZhf3TphZ5K+ZOH5cems HEEvVg4LeroqCs7VWqwqpA== 0000950148-95-000196.txt : 19950511 0000950148-95-000196.hdr.sgml : 19950511 ACCESSION NUMBER: 0000950148-95-000196 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19940331 FILED AS OF DATE: 19950502 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: PRESIDENTIAL MORTGAGE CO CENTRAL INDEX KEY: 0000757078 STANDARD INDUSTRIAL CLASSIFICATION: 6189 IRS NUMBER: 953611304 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-14500 FILM NUMBER: 95533880 BUSINESS ADDRESS: STREET 1: 21031 VENTURA BLVD CITY: WOODLAND HILLS STATE: CA ZIP: 91364 BUSINESS PHONE: 8189928999 10-Q 1 FORM 10-Q DATED 3/31/94 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q QUARTERLY REPORT _____________________ /X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1994 OR / / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM _____ TO _____ Commission file number 2-94289 PRESIDENTIAL MORTGAGE COMPANY (Exact name of Registrant as specified in its charter) California 95-3611304 (State or other jurisdiction of incorporation or organization) (IRS Employer Identification Number) 21031 Ventura Boulevard Woodland Hills, California 91364 (Address of Principal Executive Office) (Zip Code) Registrant's telephone number, including area code (818) 992-8999 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 NO X --- --- 2 PRESIDENTIAL MORTGAGE COMPANY (A California Limited Partnership) AND SUBSIDIARIES Consolidated Balance Sheets Unaudited December 31, 1993 and March 31, 1994
MARCH 31, DECEMBER 31, 1994 1993 Assets Cash & cash equivalents $ 11,909,806 $ 13,219,565 Accounts receivable, net 3,599,112 4,133,661 Interest receivable 1,910,009 2,091,425 Loans receivable, net (Note 2) 89,305,762 84,754,592 Excess yield receivable 807,761 895,220 Real estate acuqired in settlement of loans 5,531,703 6,003,295 Property and equipment, net 1,645,685 1,215,496 Goodwill 1,434,708 1,621,781 Other assets 998,229 388,555 ------------- ------------- $ 117,142,775 $ 114,323,590 ============= ============= Liabilities and Partners' Capital Liabilities: Thrift certificates payable 68,377,066 62,420,561 Accounts payable, accrued expenses and interest payable 4,327,356 5,266,440 Partnership withdrawals payable 1,120,379 1,120,379 Notes payable 22,950,000 23,800,000 Mortgages payable - secured by real estate acquired in settlement of loans 1,456,556 1,777,278 ------------- ------------- $ 98,231,357 $ 94,384,658 ------------- ------------- Partners' capital 18,911,418 19,938,932 ------------- ------------- $ 117,142,775 $ 114,323,590 ============= =============
See accompanying Notes to Consolidated Financial Statements and Management's discussion and Analysis of Financial Condition and Results of Operations -2- 3 PRESIDENTIAL MORTGAGE COMPANY (A California Limited Partnership) AND SUBSIDIARIES Consolidated Statements of Income Unaudited
THREE MONTHS ENDED March 31, March 31, 1994 1993 Interest Income: Interest and fees on loans receivable 2,847,740 3,924,513 Interest on investments 67,612 968 ------------- ------------- Total interest income 2,915,352 3,925,481 Interest Expense: Interest on thrift certificates greater than $100,00 14,014 76,807 Interest on other thrift certificates 661,321 706,839 Interest on notes payable 509,732 690,734 ------------- ------------- Total interest expense 1,185,067 1,474,380 ------------- ------------- Net interest income 1,730,285 2,451,101 Provision for loan losses 216,979 384,333 ------------- ------------- Net interest income afer provision for loan losses 1,513,306 2,066,768 Noninterest income: Trustee and reconveyance fees 877,399 1,018,793 Other income 265,977 206,286 Gain on sale of Title I loans 0 20,000 ------------- ------------- 1,143,376 1,245,079 Noninterest expense: General and administrative 1,510,673 1,196,777 Salaries, employee benefits and personnel services 1,758,787 1,461,774 Amortization of organization costs 13,546 9,065 Depreciation and amortization 135,257 39,185 Expenses on real estate acquired in settlement of loans 347,841 218,239 Net (gain)loss on sales of real estate acquired in settlement of loans (81,908) (7,110) ------------- ------------- 3,684,196 2,917,930 ------------- ------------- Net income before management fee (1,027,514) 393,917 ------------- ------------- Management fee (Note 3) 0 59,088 ------------- ------------- Net income (1,027,514) 334,829 ============= =============
See accompanying Notes to Consolidated Financial Statements and Management's discussion and Analysis of Financial Condition and Results of Operations. -3- 4 PRESIDENTIAL MORTGAGE COMPANY (A California Limited Partnership) AND SUBSIDIARIES Consolidated Statements of Cash Flows (Unaudited) Three months ended March 31, 1994 and 1993
Three Months Three Months Ended Ended 3-31-94 3-31-93 Cash flows from operating activities: Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Net income (1,027,514) 334,829 Depreciation & Amortization 148,803 135,663 Provision for loan losses 216,979 384,333 Net (gain) loss on sales of real estate acquired in settlement of loans (81,908) (7,110) (Increase) decrease in asset accounts: Accounts Receivable 534,549 (753,789) Interest receivable 181,416 6,344 Excess yield receivable 87,459 65,905 Goodwill 187,073 16,325 Other assets (623,220) (548,551) Increase (decrease) in liability accounts: Accounts payable and accrued expenses and Interest Payable (939,084) 1,500,972 Net cash provided by (used in) operating ------------- ------------- activities (1,315,447) 1,134,921 ------------- ------------- Cash flows from investing activities: (Increase) Decrease in Loans Receivable (4,768,149) 818,934 Increase in Property & Equipment (565,446) (60,341) Decrease in Mortgages Payable on Other Real Estate (320,722) (429,650) Decrease in Other Real Estate 553,500 245,136 Proceeds from repayment of receivable from related party 0 321,621 ------------- ------------- Net cash provided by (used in) investing (5,100,817) 895,700 activities ------------- ------------- Cash flow from financing activities: Distribution to Partners 0 (1,027,924) Withdrawal of Partnership Shares 0 (306,644) Increase in Thrift Certificates 5,956,505 2,707,579 Decrease in Line of Credit (850,000) (3,100,000) Proceeds from issuance of partnership shares 0 17,382 ------------- ------------- Net cash provided by (used in) financing 5,106,505 (1,709,607) activities ------------- ------------- Net decrease in Cash and Cash Equivalents (1,309,759) 321,014 Cash and Cash Equivalents at Year End 13,219,565 453,278 ------------- ------------- Cash and Cash Equivalents at March 31, 11,909,806 774,292 ============= =============
See accompanying Notes to Consolidated Financial Statements and Management's discussion and Analysis of Financial Condition and Results of Operations. -4- 5 PRESIDENTIAL MORTGAGE COMPANY (A California Limited Partnership) AND SUBSIDIARIES Notes to Combined Financial Statements 1) The unaudited financial information furnished herein, in the opinion of management, reflects all adjustments (all of which are of a normal recurring nature) which are necessary to fairly state the Partnership's financial position, its cash flows and the results of its operations. The Partnership presumes that users of the interim financial information herein have read or have access to the audited financial statements and Management's Discussion and Analysis of Financial Condition and Results of Operations for the preceding fiscal year and that the adequacy of additional disclosure needed for a fair presentation, except in regard to material contingencies, may be determined in that context. Accordingly, footnote and other disclosures which would substantially duplicate the disclosure contained in the Partnership's most recent annual report has been omitted. The interim financial information herein is not necessarily representative of operations for a full year for various reasons including changes in interest rates, volume of loans origi- nated and loans paid off. 2) Loans Receivable The following is a summmary of Loans Receivable:
@ 3-31-94 @ 12-31-93 Interest bearing loan $ 93,790,148 $ 89,482,481 Deferred loan fees, net (1,638,661) (1,605,488) Allowance for loan losses (2,845,725) (3,122,401) ---------- ---------- Total $ 89,305,762 $ 84,754,592 ========== ==========
The following is a summmary of Allowance for Loan Losses:
Balance at 12-31-93 $ 3,122,400 Additions to reserve 216,979 Charge offs/recoveries (493,654) --------- Balance at 3-31-94 $ 2,845,725 =========
-5- 6 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS FINANCIAL CONDITION Total consolidated assets of Presidential Mortgage Company (referred to herein as the "Company" with respect to consolidated information, and as "Presidential" with respect to the unconsolidated operations of Presidential Mortgage Company) increased $2.8 million (2%) to $117.1 million at March 31, 1994 from $114.3 million at December 31, 1993. The increase was due primarily to an increase of $4.5 million (5%) in net loans. The increase in net loans was partially offset by reductions of $1.3 million (10%) in cash and cash equivalents and $.5 million (8%) in OREO (other real estate acquired in settlement of loans) due to sales of OREO. Total liabilities increased $3.8 million (4%) to $98.2 at March 31, 1994 from $94.4 at December 31, 1993. The increase was due entirely to an increase of $6.0 million (10%) in thrift certificates issued by Pacific Thrift, to $68.4 million at March 31, 1994 from $62.4 million at December 31, 1993. The increase in thrift certificates was partially offset by reductions of $.9 million (18%) in accounts and interest payable, $.9 million (4%) in notes payable, due to pay down of the bank debt, and $.3 million (18%) in mortgages payable secured by OREO. Total partnership capital decreased by $1.0 million (5%) to $18.9 million at March 31, 1994 from $19.9 at December 31, 1993, due to the net operating loss incurred during the quarter. RESULTS OF OPERATIONS The Company incurred a net operating loss of $1.0 million for the quarter ended March 31, 1994 compared with a net operating profit of $.3 million for the quarter ended March 31, 1993. The net loss in the first quarter of 1994 was due primarily to declines in net interest income and increases in non-interest expense. Total interest income declined $1.0 million (26%), and net interest income after provision for loan losses decreased by $.6 million (29%), primarily due to reduced interest rates charged on loans. Non-interest expense increased by $.8 million (28%) for the quarter ended March 31, 1994, including increases of $.3 million (25%) in general and administrative expenses due to write-offs of certain fixed assets and an increase in professional fees, and $.3 million (20%) in salaries and employee benefits, due to increased staffing at Pacific Thrift and a reduced deferral of loan origination costs pursuant to FASB 91. PROVISION FOR LOAN LOSSES The provision for loan losses was $.2 million for the first quarter of 1994, compared with $.4 million for the first quarter of 1993. The total allowance for loan losses was $2.8 million at March 31, 1994 compared with $3.1 million at December 31, 1993. Management believes that a lower allowance for loan losses was warranted because of a reduction in total loan delinquencies from total delinquencies at March 31, 1993 and December 31, 1993. LIQUIDITY AND CAPITAL RESOURCES The primary source of the Company's liquidity is the cash and cash equivalents maintained by Pacific Thrift in connection with its deposit-taking and lending activities. At March 31, 1994, cash and cash equivalent assets totalled $11.9 million, compared with $13.2 million at December 31, 1993. Presidential does not maintain significant cash and cash equivalent assets on its own behalf, and uses substantially all of its cash flow to pay down the bank debt on a monthly basis. Pacific Thrift is subject to certain leverage and risk-based capital adequacy standards applicable to FDIC-insured institutions. At March 31, 1994, Pacific Thrift's leverage and risk-based capital adequacy ratios exceeded the FDIC's requirements for "well-capitalized" institutions. See the Company's Annual Report on Form 10-K for the year ended December 31, 1993, Item 1. "Business -- Supervision and Regulation -- Governmental Policies and Recent Legislation -- Capital Adequacy Guidelines." At March 31, 1994, the Company had no material outstanding commitments to fund loans. Certificates of deposit which are scheduled to mature in one year or less from March 31, 1994 totalled $32.7 million. Based upon historical experience, management believes that a significant portion of such deposits will be renewed and will remain with Pacific Thrift. As indicated in the Statements of Cash Flows, the Company utilized $1.3 million in cash from operating activities from December 31, 1993 through March 31, 1994, primarily reflecting the net operating loss for the quarter. -6- 7 The Company used $5.1 million in cash from investing activities, primarily to fund a $4.8 million increase in loans receivable and a $.6 million in additions to property and equipment. The Company realized $5.1 million from financing activities from December 31, 1993 through March 31, 1994, reflecting the issuance of $6.0 million in thrift certificates, used to funding lending activity by Pacific Thrift. Presidential used $.9 million in cash from proceeds of loan payments and sales of loans to pay down the bank debt. No distributions or withdrawal payments were made to limited partners in accordance with the restrictions on such payments under the bank loan agreement. PART II OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS. There have been no material developments in legal proceedings since the date of filing of the Company's Annual Report on Form 10-K for the year ended December 31, 1993. ITEM 2. CHANGES IN SECURITIES. None. ITEM 3. DEFAULTS UPON SENIOR SECURITIES. None. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. No matters were submitted to the vote of security holders during the quarter ended March 31, 1994. ITEM 5. OTHER INFORMATION. None. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K. (a) Exhibits. None. (b) Reports on Form 8-K. The Company filed no Reports on Form 8-K during the first quarter of 1994. -7- 8 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized. PRESIDENTIAL MORTGAGE COMPANY (Registrant) May 1, 1995 JOEL R. SCHULTZ Date ------------------------------------- Joel R. Schultz, Chief Managing Officer of Registrant; President of Presidential Services Corporation ("PSC"), general partner of Presidential Management Company, a California limited partnership, general partner of the Registrant May 1, 1995 CHARLES J. SIEGEL Date ------------------------------------- Charles J. Siegel, Chief Financial and Accounting Officer of the Registrant -8- -----END PRIVACY-ENHANCED MESSAGE-----