-----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, HNsS10suHuc6PmqrcDVkSsgMh8ZiSLFQEZ+ZXlgOz0jyD0Of1SR1TdNjyAI8k3io wbryQExnCie4244KyY6PRg== 0000950148-95-000440.txt : 19950803 0000950148-95-000440.hdr.sgml : 19950803 ACCESSION NUMBER: 0000950148-95-000440 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950331 FILED AS OF DATE: 19950802 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: PRESIDENTIAL MORTGAGE CO CENTRAL INDEX KEY: 0000757078 STANDARD INDUSTRIAL CLASSIFICATION: ASSET-BACKED SECURITIES [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: 95558184 BUSINESS ADDRESS: STREET 1: 21031 VENTURA BLVD CITY: WOODLAND HILLS STATE: CA ZIP: 91364 BUSINESS PHONE: 8189928999 10-Q 1 FORM 10-Q FOR THE QUARTERLY PERIOD ENDED 3/31/95 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, 1995 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 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) decreased $2.0 million (1.9%) to $101.7 million at March 31, 1995 from $103.7 million at December 31, 1994. The decrease resulted primarily from declines in cash and cash equivalents, loans receivable, excess yield receivable, and interest receivable, offset by an increase in accounts receivable. Loans receivable decreased by $5.8 million (8.9%), to $59.3 million from $65.1 million, as a result of loan pay offs and loan sales. Cash and cash equivalents decreased by $1.3 million (6.9%), to $18.3 million from $19.6 million. Interest receivable declined by $.5 million (41.9%), to $.6 million from $1.1 million, primarily due to the reduction of the loan portfolio. Accounts receivable increased by $6.2 million (111.8%), primarily due to $6.1 million of loans originated for sale which were sold in March, for which payment was not received until April 1995. In addition, accounts receivable reflect an asset valued by management at $.8 million, representing the present value of an annual servicing released fee payable to Pacific Thrift and Loan Company ("Pacific Thrift"), the Company's primary operating subsidiary, by the purchaser of certain loans originated for sale. See the Company's Annual Report on Form 10-K for the year ended December 31, 1994, Item 1. "Business -- Lending Activities -- Loans Originated for Sale." Total liabilities decreased $2.3 million (2.4%) to $91.1 at March 31, 1995 from $93.3 at December 31, 1994. The decrease resulted primarily from declines in notes payable, thrift certificates payable and mortgages payable on OREO. Notes payable decreased by $1.0 million (6.5%), to $13.8 million from $14.8 million, due to pay down of the bank debt. Thrift certificates decreased by $.5 million (.7%) to $69.0 million from $69.5 million. Mortgages payable on OREO decreased by $.5 million (22.1%), to $1.8 million from $2.3 million. Total partnership capital increased by $.2 million (2.0%) to $10.6 million from $10.4 million, due to net income of $.2 million earned during the quarter ended March 31, 1995. RESULTS OF OPERATIONS The Company incurred a net operating loss of $.2 million for the quarter ended March 31, 1995, compared with a net operating loss of $1.0 million for the quarter ended March 31, 1994. However, due to the recognition of a $.4 million tax benefit from Pacific Thrift's operating loss carryforward, net income after taxes was $.2 million. The reduction in the net operating loss in the first quarter of 1995 was due primarily to an increase in total interest income. Total interest income increased by $1.2 million (41.5%), which included an increase of $1.1 million (37.0%) in interest and fees on loans receivable, due to increased originations and sales of loans originated for sale, and $.2 million (234.5%) in interest on investments, due to higher balances and yields on cash and cash equivalents. Total interest expense increased by $.2 million (18.6%) to $1.4 million from $1.2 million, due to increased rates paid by Pacific Thrift on thrift certificates under $100,000. Net interest income after provision for loan losses increased by $.8 million (50.4%). Noninterest income decreased by less than $.1 million ($4.4%) to $1.09 million from $1.14 million, primarily as a result of a $.1 million decrease in trustee and reconveyance fees. Noninterest expense decreased by $.1 million (2.5%) to $3.6 million from $3.7 million, primarily as a result of a $.2 million reduction in expenses on OREO and a $.1 million reduction in general and administrative expense, partially offset by a net loss on sales of OREO of less than $.1 million. PROVISION FOR LOAN LOSSES The provision for loan losses was $.4 million for the first quarter of 1995, compared with $.2 million for the first quarter of 1994. The total allowance for loan losses was $3.9 million at March 31, 1995 compared with $4.3 million at December 31, 1994, reflecting sales and payoffs of loans as to which reserves had previously been taken and improvements in status in some portfolio loans. Included in loan sales were $2 million in Title I loans, as to which Pacific Thrift had previously reserved $.2 million. 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, 1995, cash and cash equivalent assets totalled $18.3 million, compared with $19.6 million at December 31, 1994. Presidential does not maintain 2 3 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, 1995, Pacific Thrift was classified as "adequately capitalized." See the Company's Annual Report on Form 10-K for the year ended December 31, 1994, Item 1. "Business -- Supervision and Regulation -- Governmental Policies and Recent Legislation -- Capital Adequacy Guidelines." At March 31, 1995, 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, 1995 totalled $57.2 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 used $4.5 million in cash from operating activities from December 31, 1994 through March 31, 1995, primarily reflecting a temporary increase of $6.2 million in loans originated for sale which were sold in March 1995 for which payment was received in April. In addition, accounts receivable reflects an asset valued by management at $.8 million, representing the present value of an annual servicing released fee payable to Pacific Thrift by the purchaser of certain loans originated for sale. See the Company's Annual Report on Form 10-K for the year ended December 31, 1994, Item 1. "Business -- Lending Activities -- Loans Originated for Sale." The Company realized $4.5 million from investing activities for the three months ended March 31, 1995, primarily due to a net decrease of $5.3 million in loans receivable. The Company used $1.4 million from financing activities for the three months ended March 31, 1995, primarily reflecting a $.5 million decrease in thrift certificates and a $1.0 million decrease in 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, 1994. 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, 1995. ITEM 5. OTHER INFORMATION. None. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K. (a) Exhibits. None. (b) Reports on Form 8-K. None. 3 4 PRESIDENTIAL MORTGAGE COMPANY (A California Limited Partnership) AND SUBSIDIARIES Consolidated Balance Sheets Unaudited December 31, 1994 and March 31, 1995
MARCH 31, DECEMBER 31, 1995 1994 Assets Cash & cash equivalents $ 18,279,000 $ 19,628,000 Accounts receivable, net 11,752,000 5,549,000 Interest receivable 653,000 1,125,000 Loans receivable, net (Note 2) 59,280,000 65,056,000 Excess yield receivable 526,000 888,000 Real estate acuqired in settlement of loans 7,504,000 7,621,000 Property and equipment, net 1,513,000 1,322,000 Goodwill 1,676,000 1,749,000 Other assets 511,000 809,000 ------------ ------------ $101,694,000 $103,747,000 ============ ============ Liabilities and Partners' Capital Liabilities: Thrift certificates payable 69,032,000 69,501,000 Accounts payable, accrued expenses and interest payable 5,299,000 5,610,000 Partnership withdrawals payable 1,120,000 1,120,000 Notes payable 13,809,000 14,778,000 Mortgages payable - secured by real estate acquired in settlement of loans 1,802,000 2,313,000 ------------ ------------ $ 91,062,000 $ 93,322,000 ------------- ------------ Partners' capital 10,632,000 10,425,000 ------------ ------------ $101,694,000 $103,747,000 ============ ============
See accompanying Notes to Consolidated Financial Statements and Management's discussion and Analysis of Financial Condition and Results of Operations 5 PRESIDENTIAL MORTGAGE COMPANY (A California Limited Partnership) AND SUBSIDIARIES Consolidated Statements of Income Unaudited
THREE MONTHS ENDED March 31, March 31, 1995 1994 Interest Income: Interest and fees on loans receivable 3,901,000 2,848,000 Interest on investments 226,000 67,000 ---------- ---------- Total interest income 4,127,000 2,915,000 Interest Expense: Interest on thrift certificates greater than $100,000 4,000 14,000 Interest on other thrift certificates 976,000 661,000 Interest on notes payable 425,000 510,000 ---------- ---------- Total interest expense 1,405,000 1,185,000 ---------- ---------- Net interest income 2,722,000 1,730,000 Provision for loan losses 446,000 217,000 ---------- ---------- Net interest income afer provision for loan losses 2,276,000 1,513,000 Noninterest income: Trustee and reconveyance fees 785,000 877,000 Other income 308,000 266,000 Gain on sale of Title I loans 0 0 ---------- ---------- 1,093,000 1,143,000 Noninterest expense: General and administrative 1,413,000 1,511,000 Salaries, employee benefits and personnel services 1,797,000 1,759,000 Amortization of organization costs 28,000 13,000 Depreciation and amortization 116,000 135,000 Expenses on real estate acquired in settlement of loans 161,000 348,000 Net (gain)loss on sales of real estate acquired in settlement of loans 77,000 (82,000) ---------- ---------- 3,592,000 3,684,000 ---------- ---------- Net income before tax provision (223,000) (1,028,000) ---------- ---------- Tax Provision (430,000) 0 ---------- ----------- Net income 207,000 (1,028,000) ========== ===========
See accompanying Notes to Consolidated Financial Statements and Management's discussion and Analysis of Financial Condition and Results of Operations. 6 PRESIDENTIAL MORTGAGE COMPANY (A California Limited Partnership) AND SUBSIDIARIES Consolidated Statements of Cash Flows (Unaudited) Three months ended March 31, 1995 and 1994
Three Months Three Months Ended Ended 3-31-95 3-31-94 Cash flows from operating activities: Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Net income 207,000 (1,028,000) Depreciation & Amortization 144,000 149,000 Provision for loan losses 446,000 217,000 Net (gain) loss on sales of real estate acquired in settlement of loans 77,000 (82,000) (Increase) decrease in asset accounts: Accounts Receivable (6,203,000) 535,000 Interest receivable 472,000 182,000 Excess yield receivable 362,000 87,000 Goodwill 73,000 187,000 Other assets 270,000 (623,000) Increase (decrease) in liability accounts: Accounts payable and accrued expenses and Interest Payable (312,000) (939,000) Net cash provided by (used in) operating ----------- ----------- activities (4,464,000) (1,315,000) ----------- ----------- Cash flows from investing activities: (Increase) Decrease in Loans Receivable 5,331,000 (4,768,000) Increase in Property & Equipment (307,000) (566,000) Decrease in Mortgages Payable on Other Real Estate (511,000) (321,000) Decrease in Other Real Estate 40,000 554,000 Proceeds from repayment of receivable from related party 0 0 ----------- ----------- Net cash provided by (used in) investing activities 4,553,000 (5,101,000) ----------- ----------- Cash flow from financing activities: Distribution to Partners 0 0 Withdrawal of Partnership Shares 0 0 Increase in Thrift Certificates (469,000) 5,957,000 Decrease in Line of Credit (969,000) (850,000) Proceeds from issuance of partnership shares 0 0 ----------- ----------- Net cash provided by (used in) financing activities (1,438,000) 5,107,000 ----------- ----------- Net decrease in Cash and Cash Equivalents (1,349,000) (1,309,000) Cash and Cash Equivalents at Year End 19,628,000 13,219,000 ----------- ----------- Cash and Cash Equivalents at March 31, 18,279,000 11,910,000 =========== ===========
See accompanying Notes to Consolidated Financial Statements and Management's discussion and Analysis of Financial Condition and Results of Operations. 7 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 originated and loans paid off. 2) Loans Receivable The following is a summary of Loans Receivable:
@ 3-31-95 @ 12-31-94 Interest bearing loans $64,470,000 $70,791,000 Deferred loan fees, net (1,251,000) (1,428,000) Allowance for loan losses (3,940,000) (4,307,000) ----------- ----------- Total $59,279,000 $65,056,000 =========== ===========
The following is a summary of the Allowance for Loan Losses: Balance at 12-31-94 $4,307,000 Additions to reserve 446,000 Chargeoffs/recoveries (813,000) ---------- Balance at 3-31-95 $3,940,000 ==========
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) July 31, 1995 JOEL R. SCHULTZ --------------- 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 July 31, 1995 CHARLES J. SIEGEL ----------------- Charles J. Siegel, Chief Financial and Accounting Officer of the Registrant EX-27 2 FINANCIAL DATA SCHEDULE
9 1,000 6-MOS DEC-31-1994 MAR-31-1994 599 180 9,500 0 0 8,000 0 63,219 3,940 101,694 69,032 0 6,501 15,529 0 0 0 10,632 101,694 3,901 226 0 4,129 980 1,405 2,722 446 0 3,592 223 223 0 0 207 0 0 11.59 5,389 3,129 324 0 4,307 813 0 3,940 3,940 0 0
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