SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTER ENDED SEPTEMBER 30, 1997
COMMISSION FILE NUMBER: 333-10495
CHEVY CHASE PREFERRED CAPITAL CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
MARYLAND 52-1998335
(STATE OR OTHER JURISDICT(I.R.S. EMPLOYER
INCORPORATION OR ORGANIZAIDENTIFICATION NO.)
8401 CONNECTICUT AVENUE
CHEVY CHASE, MARYLAND 20815
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICE) (ZIP CODE)
(301) 986-7000
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
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
THE NUMBER OF SHARES OUTSTANDING OF THE REGISTRANT'S SOLE CLASS OF COMMON STOCK
IS 100 SHARES, $1 PAR VALUE, AS OF OCTOBER 31, 1997.
<PAGE>
CHEVY CHASE PREFERRED CAPITAL CORPORATION
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS: PAGE
(A)STATEMENTS OF FINANCIAL CONDITION AT SEPTEMBER 30, 1997
AND DECEMBER 31, 1996................................ 1
(B)STATEMENTS OF OPERATIONS FOR THE THREE MONTHS AND
NINE MONTHS ENDED SEPTEMBER 30, 1997................. 2
(C)STATEMENT OF STOCKHOLDERS' EQUITY FOR THE NINE MONTHS
ENDED SEPTEMBER 30, 1997............................. 3
(D)STATEMENT OF CASH FLOWS FOR THE NINE MONTHS ENDED
SEPTEMBER 30, 1997............................... 4
(E)NOTES TO FINANCIAL STATEMENTS...................... 5
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS................ 7
ITEM 3. QUANTITATIVE AND QUALITATIVE ANALYSIS ABOUT MARKET
RISK 11
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS ................................ 11
ITEM 2. CHANGES IN SECURITIES............................. 11
ITEM 3. DEFAULTS UPON SENIOR SECURITIES................... 11
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 11
ITEM 5. OTHER INFORMATION................................. 11
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K ................. 11
i
<PAGE>
CHEVY CHASE PREFERRED CAPITAL CORPORATION
STATEMENTS OF FINANCIAL CONDITION
(UNAUDITED)
SEPTEMBER 30, DECEMBER 31,
1997 1996
---- ----
ASSETS
Cash and interest-bearing deposits $ 3,877,149 $ 365,175
Residential mortgage loans (net of
allowance for losses of $29,068
at september 30, 1997) 291,331,820 294,504,138
Accounts receivable from parent 9,397,179 5,844,149
Accrued interest receivable 1,683,399 1,604,826
Prepaid expenses 463,747 -
Total assets $ 306,753,294 $ 302,318,288
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable to parent $ 156,656 $ 483,080
Accounts payable - others - 3,334
Dividends payable to parent 1,500,000 584,749
Dividends payable - others 3,890,625 1,253,640
-------------- ---------------
Total liabilities 5,547,281 2,324,803
-------------- ---------------
10 3/8% Noncumulative Exchangeable
Preferred Stock, series a, $5 par
value, 10,000,000 shares authorized,
3,000,000 shares issued and outstanding
(liquidation value of $50 per share
plus accrued and unpaid dividends) 15,000,000 15,000,000
Common Stock, $1 par value,
1,000 shares authorized, 100 shares
issued and outstanding 100 100
Capital contributed in excess of par 284,999,900 284,993,385
Retained earnings 1,206,013 -
-------------- --------------
Total stockholders' equity $ 301,206,013 $ 299,993,485
-------------- --------------
Total liabilities and
stockholders' equity $ 306,753,294 $ 302,318,288
============= =============
The Notes to Financial Statements are an integral part of these statements.
1
<PAGE>
CHEVY CHASE PREFERRED CAPITAL CORPORATION
STATEMENTS OF OPERATIONS
(UNAUDITED)
Three Months Nine Months
Ended Ended
September 30, 1997 September 30, 1997
Interest income
Residential mortgage loans $ 5,809,030 $ 17,274,381
Other 40,576 82,802
-------------- --------------
Total interest income 5,849,606 17,357,183
Provision for loan losses 16,033 35,287
-------------- --------------
Total interest income after
Provision for loan losses 5,833,573 17,321,896
------------- ------------
Operating expenses
Lloan servicing fees paid to parent 278,019 852,918
Advisory fees paid to parent 50,000 150,000
Directors fees 7,500 19,000
General and administrative 63,108 122,090
------------- -------------
Total operating expenses 398,627 1,144,008
------------- -------------
NET INCOME $ 5,434,946 $ 16,177,888
============ ============
PREFERRED STOCK DIVIDENDS 3,890,625 11,671,875
------------- -------------
EARNINGS AVAILABLE TO
COMMON STOCKHOLDER $ 1,544,321 $ 4,506,013
============= =============
EARNINGS PER COMMON SHARE $ 15,443.21 $ 45,060.13
============= =============
The Notes to Financial Statements are an integral part of these statements.
2
<PAGE>
CHEVY CHASE PREFERRED CAPITAL CORPORATION
STATEMENT OF STOCKHOLDERS' EQUITY
(UNAUDITED)
For the Nine Months Ended September 30, 1997
<TABLE>
<CAPTION>
Capital
Contributed Total
Preferred common in excess Retained Stockholders'
stock Stock of par Earnings Equity
<S> <C> <C> <C> <C> <C>
Balance, December 31, 1996$ 15,000,000 $ 100 $ 284,993,385 $ - $299,993,485
Net income - - - 16,177,888 16,177,888
Capital contribution from
common stockholder - - 6,515 - 6,515
Dividends on 103/8%
Noncumulative Exchangeable
Preferred Stock, series a - - - (11,671,875) (11,671,875)
Dividends on Common Stock - - - (3,300,000) (3,300,000)
--------------------------------------------------------------------------
Balance, September 30, 1997$ 15,000,000 $ 100 $ 284,999,900 $ 1,206,013 $301,206,013
================ ============ ============= ============== ============
</TABLE>
The Notes to Financial Statements are an integral part of this statement.
3
<PAGE>
CHEVY CHASE PREFERRED CAPITAL CORPORATION
STATEMENT OF CASH FLOWS
(UNAUDITED)
For the Nine Months Ended September 30, 1997
Cash flows from operating activities:
Net income $ 16,177,888
Adjustments to reconcile net income to net cash
Provided by operating activities:
Provision for loan losses 35,287
Increase in accounts receivable from parent (3,553,030)
Increase in accrued interest receivable (78,573)
Increase in prepaid expenses (463,747)
Decrease in accounts payable to parent (326,424)
Decrease in accounts payable - others (3,334)
-----------
Net cash provided by operating activities 11,788,067
-----------
Cash flows from investing activities:
Purchases of residential mortgage loans (54,740,287)
Repayments of residential mortgage loans 57,662,596
Net proceeds on sale of real estate acquired
in settlement of loans 214,722
-----------
Net cash used in investing activities 3,137,031
-----------
Cash flows from financing activities:
Capital contribution from common stockholder 6,515
Dividends paid on preferred stock (9,034,890)
Dividends paid on common stock (2,384,749)
-----------
Net cash provided by financing activities (11,413,124)
-----------
Net increase in cash and cash equivalents 3,511,974
Cash equivalents at beginning of period 365,175
-----------
Cash and cash equivalents at september 30, 1997$ $ 3,877,149
===========
Supplemental disclosures of non-cash activities:
loans receivable transferred to real estate
acquired in settlement of loans $ 220,941
===========
The Notes to Financial Statements are an integral part of this statement.
4
<PAGE>
CHEVY CHASE PREFERRED CAPITAL CORPORATION
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1 - ORGANIZATION AND BASIS OF PRESENTATION:
Chevy Chase Preferred Capital Corporation (the "Company") is a Maryland
corporation which was incorporated on August 20, 1996 and created for the
purpose of acquiring and holding real estate mortgage assets. The Company was
formed by Chevy Chase Bank, F.s.B. (the "Bank"), a federally insured stock
savings bank.
On November 5, 1996, the Company was initially capitalized with the issuance to
the Bank of 100 shares of the Company's common stock (the "Common Stock"), $1.00
par value. On December 3, 1996, the Company commenced its operations upon
consummation of an initial public offering of 3,000,000 shares of the Company's
103/8% Noncumulative Exchangeable Preferred Stock, Series A (the "Series A
Preferred Shares"), $5.00 par value. These offerings, together with a separate
capital contribution made by the Bank on December 3, 1996, raised net capital of
$300 million. All Common Stock is held by the Bank.
The Company used the proceeds raised from the initial public offering of the
Series A Preferred shares, the sale of Common stock to the Bank and the
additional capital contribution to the company by the bank to pay the expenses
related to the offering and the formation of the Company and to purchase from
the Bank the Company's initial portfolio of residential mortgage loans at their
estimated fair value of approximately $300 million. Such loans were recorded in
the accompanying statement of financial condition at the Bank's historical cost
basis which approximated their estimated fair values.
NOTE 2 - RESIDENTIAL MORTGAGE LOANS:
Residential mortgage loans consist of one-year adjustable rate mortgages
("ARMs"), three-year ARMs and five-year and ten-year fixed-rate loans with
automatic adjustment to one-year ARMs after the respective fixed rate period and
fixed-rate mortgages. Each of the mortgage loans is secured by a mortgage, deed
of trust or other security instrument which created a first lien on the
residential dwellings located in their respective jurisdictions. The following
shows the residential mortgage loan portfolio by type at september 30, 1997:
One-year ARMs $ 23,362,449
Three-year ARMs 86,807,221
5/1 ARMs 172,433,575
10/1 ARMs 7,166,820
Fixed-rate 1,590,823
--------------
291,360,888
Less:
Allowance for loan
losses 29,068
--------------
Total $ 291,331,820
==============
5
<PAGE>
CHEVY CHASE PREFERRED CAPITAL CORPORATION
NOTES TO FINANCIAL STATEMENTS (Continued)
(Unaudited)
NOTE 3 - PREFERRED STOCK
On December 3, 1996, the Company sold $150 million of Series A Preferred Shares,
$5.00 par value per share and received net cash proceeds of $144 million. Cash
dividends on the series A Preferred Shares are payable quarterly in arrears at
an annual rate of 10 3/8%.The liquidation value of each Series A Preferred share
is $50 plus accrued and unpaid dividends. The Series A Preferred shares are not
redeemable until January 15, 2007, and are redeemable thereafter at the option
of the company. Except under certain circumstances, the holders of the Series A
Preferred Shares have no voting rights. The Series A Preferred Shares are
automatically exchangeable for a new series of preferred stock of the bank upon
the occurrence of certain events.
NOTE 4 - DIVIDENDS:
During the three months ended september 30, 1997, the Company's Board of
Directors declared $3,890,625 and $1,500,000 of preferred stock and common stock
dividends, respectively, out of the retained earnings of the Company. These
dividends were paid in October 1997.
6
<PAGE>
PART I
ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
FINANCIAL CONDITION
Organization
Chevy Chase Preferred Capital Corporation (the "Company") is a Maryland
corporation incorporated on August 20, 1996, and created for the purpose of
acquiring and holding real estate mortgage assets ("Mortgage Assets"). The
Company has elected to be treated as a real estate investment trust (a "REIT")
under the Internal Revenue Code of 1986, as amended (the "Code"), and generally
will not be subject to federal income tax to the extent that it distributes its
earnings to its stockholders and maintains its qualification as a REIT. All of
the shares of the Company's common stock, par value $1.00 per share (the "Common
Stock"), are owned by Chevy Chase Bank, F.S.B., a federally chartered and
federally insured stock savings bank (the "Bank"). The Company was formed by the
Bank to acquire and hold mortgage assets and to provide the Bank with a
cost-effective means of raising capital.
On November 5, 1996, the Company was initially capitalized by the issuance to
the Bank of 100 shares of Common Stock. On December 3, 1996, the Company
commenced its operations upon the closing of the initial public offering (the
"Offering") of 3,000,000 shares of the Company's 10 3/8% Noncumulative
Exchangeable Preferred Stock, Series A, par value $5.00 per share (the "Series A
Preferred Shares"). The net proceeds to the Company from the sale of the Series
A Preferred Shares were $144.0 million. Simultaneous with the consummation of
the Offering, the Bank made capital contributions to the Company with respect to
its Common Stock in the amount of $150.0 million, plus an additional $6.0
million representing the underwriting commissions and the expenses of the
Offering.
The Company used the aggregate net proceeds of $300.0 million received in
connection with both the Offering and the capital contributions by the Bank to
purchase from the Bank the Company's initial portfolio of Mortgage Assets,
comprised entirely of residential mortgage loans, at their estimated fair value
of approximately $300.0 million. Such loans were recorded at the Bank's
historical cost basis, which approximated their estimated fair values.
Residential Mortgage Loans
At September 30, 1997, the Company had $291,331,820 invested in loans secured by
first mortgages or deeds of trust on single-family residential real estate
properties ("Residential Mortgage Loans"). The $3,172,318 decrease from the
balance at December 31, 1996, resulted from Residential Mortgage Loan principal
collections of $57,662,596, which were offset by purchases of $54,740,287. In
addition, the Company received proceeds of $214,722 on the sale of one property
classified as real estate acquired in settlement of loans during the nine months
ended September 30, 1997. Management intends to continue to reinvest proceeds
received from repayments of loans in additional Residential Mortgage Loans to be
purchased from either the Bank or its affiliates.
7
<PAGE>
At September 30, 1997, the Company had four non-accrual loans (loans
contractually past due 90 days or more or with respect to which other factors
indicate that full payment of principal and interest is unlikely) with an
aggregate principal balance of $581,360.
At September 30, 1997, the Company had five delinquent loans (loans delinquent
30-89 days) with an aggregate principal balance of $1,099,981 (or 0.38% of
loans).
Allowance for Loan Losses
Management reviews the loan portfolio to establish an allowance for estimated
losses if deemed necessary. An analysis of whether an allowance for loan losses
is required is performed periodically, and an allowance is provided after
considering such factors as the economy in lending areas, delinquency
statistics, past loss experience and estimated future loan losses. The allowance
for loan losses is based on estimates, and ultimate losses may vary from current
estimates. as adjustments to the allowance become necessary, provisions for loan
losses are reported in operations in the periods they are determined to be
necessary. The activity in the allowance for loan losses for the three months
and nine months ended september 30, 1997 is as follows:
Three Months Nine Months
Ended Ended
September 30, 1997 September 30, 1997
------------------ ------------------
Balance at beginning of period $ 10,659 $ -
Provision for loan losses 16,033 35,287
Charge-offs - (8,595)
Recoveries 2,376 2,376
------------------ ------------------
Balance at end of period $ 29,068 $ 29,068
================== ==================
Interest Rate Risk
The Company's income consists primarily of interest payments on residential
mortgage loans. If there is a decline in interest rates (as measured by the
indices upon which the interest rates of the arms are based), then the Company
will experience a decrease in income available to be distributed to its
stockholders. in such an interest rate environment, the Company may experience
an increase in prepayments on its Residential Mortgage Loans and may find it
difficult to purchase additional loans bearing interest rates sufficient to
support payment of dividends on the Series A Preferred Shares. In addition,
certain ARM products which the Company holds allow borrowers to convert an
adjustable rate mortgage to a fixed rate mortgage, thus "locking in" a fixed
interest rate at a time when interest rates have declined.
Based on the outstanding balance of the Company's Residential Mortgage Loans at
September 30, 1997 and the interest rate on such loans, anticipated annual
interest income net of servicing fees on the Company's loan portfolio was
approximately 141.6% of the projected annual dividend on the Series A Preferred
shares. There can be no assurance that an interest rate environment in which
there is a significant decline in interest rates would not adversely affect
the Company's ability to pay dividends on the Series A Preferred Shares.
8
<PAGE>
Significant Concentration of Credit Risk
Concentration of credit risk arises when a number of customers engage in similar
business activities, or activities in the same geographical region, or have
similar economic features that would cause their ability to meet contractual
obligations to be similarly affected by changes in economic conditions.
concentration of credit risk indicates the relative sensitivity of the company's
performance to both positive and negative developments affecting a particular
industry.
The Company's exposure to geographic concentrations directly affects the credit
risk of the Residential Mortgage Loans within the portfolio. Substantially all
of the Company's Residential Mortgage Loans are secured by residential real
estate properties located in the Washington, D.C. metropolitan area.
Consequently, these loans may be subject to a greater risk of default than other
comparable Residential Mortgage Loans in the event of adverse economic,
political or business developments and natural hazards in the region that may
affect the ability of residential property owners in the region to make payments
of principal and interest on the underlying mortgages.
Liquidity and Capital Resources
The objective of liquidity management is to ensure the availability of
sufficient cash flows to meet all of the Company's financial commitments. In
managing liquidity, the Company takes into account various legal limitations
placed on a REIT as discussed below in "tax status of the Company."
The Company's principal liquidity need will be to fund the acquisition of
additional Mortgage Assets as Mortgage Assets held by the Company are repaid.
The acquisition of such additional Mortgage Assets held by the Company will be
funded with the proceeds of principal repayments on its current portfolio of
mortgage assets. The Company does not anticipate that it will have any other
material capital expenditures. The Company believes that cash generated from the
payment of principal and interest on its Mortgage Asset portfolio will provide
sufficient funds to meet its operating requirements and to pay dividends in
accordance with the requirements to be treated as a REIT for income tax purposes
for the foreseeable future. The Company may borrow as it deems necessary.
Tax Status of the Company
The Company has elected to be taxed as a REIT under sections 856 through 860 of
the Code beginning with its taxable year ended December 31, 1996. As a REIT, the
Company generally will not be subject to federal income tax on its net income
(excluding capital gains) provided that it distributes 100 percent of its annual
REIT taxable income to its stockholders, and meets certain organizational, stock
ownership, income, asset and operational requirements. If in any taxable year
the Company fails to qualify as a REIT, the Company would not be allowed a
deduction for distributions to stockholders in computing its taxable income and
would be subject to federal and state income tax (including any applicable
alternative minimum tax) on its taxable income at regular corporate rates. In
addition, the Company would also be disqualified from treatment as a REIT for
the four taxable years following the year during which qualification was lost.
9
<PAGE>
RESULTS OF OPERATIONS
During the three months ended September 30, 1997 (the "three-month period") and
nine months ended September 30, 1997 (the "nine-month period"), the Company
reported net income of $5,434,946 and $16,177,888, respectively.
Interest income on Residential Mortgage Loans totaled $5,809,030 and $17,274,381
for the three-month and nine-month periods, respectively, which represents an
average yield on such loans of 7.90% and 7.81%, respectively. The average
balance of the Residential Mortgage Loan portfolio for the three-month period
was $293,948,202 and for the nine-month period was $294,856,617. The Company
would have recorded an additional $11,341 and $20,440 in interest income for the
three-month and nine-month periods, respectively, had its non-accrual loans been
current in accordance with their original terms.
Other interest income of $40,576 and $82,802 was recognized on the Company's
interest bearing deposits during the three-month and nine-month periods,
respectively.
Provision for loan losses of $16,033 and $35,287 was recorded on the Company's
loan portfolio during the three-month and nine-month periods, respectively.
Operating expenses totaling $398,627 and $1,144,008 for the three-month and
nine-month periods, respectively, were comprised of loan servicing fees paid to
parent, advisory fees paid to parent, directors fees and general and
administrative expenses. Loan servicing fees paid to parent of $278,019 and
$852,918, for the three-month and nine-month periods, respectively, were based
on a servicing fee rate of 0.375% of the outstanding principal balances of
Residential Mortgage Loans, pursuant to the servicing agreement between the
Company and the Bank. advisory fees paid to parent for the three-month and
nine-month periods totaled $50,000 and $150,000, respectively. Directors fees
totaled $7,500 and $19,000, respectively, and represent compensation to the two
independent members of the Board of Directors. General and administrative
expenses consist primarily of the amortization of organizational costs.
On September 29, 1997, the Company declared, out of the retained earnings of the
Company, a cash dividend of $1.296875 per share on the outstanding shares of
Series A Preferred Stock. Dividends of $3,890,625 were subsequently paid on
October 15, 1997.
The Company also declared, out of the retained earnings of the Company, a cash
dividend of $15,000.00 per share of common stock. The $1,500,000 dividend was
paid on October 15, 1997.
10
<PAGE>
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company is not the subject of any material litigation. None of the Company,
the Bank or any affiliate of the Bank is currently involved in nor, to the
Company's knowledge, is currently threatened with any material litigation with
respect to the Residential Mortgage Loans included in the portfolio, other than
routine litigation arising in the ordinary course of business, most of which is
covered by liability insurance.
ITEM 2. CHANGES IN SECURITIES
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits required by item 601 of Regulation S-K are set forth below.
EXHIBIT
NO. EXHIBIT
11 Computation of Earnings Per Common Share included in Part i, Item 1
of this report
27 Financial data Schedule
(b) No reports on Form 8-K were issued during the three months ended September
30, 1997.
11
<PAGE>
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 THEREUNTO DULY AUTHORIZED.
CHEVY CHASE PREFERRED CAPITAL CORPORATION
(REGISTRANT)
NOVEMBER 7, 1997 BY:/S/ STEPHEN R. HALPIN, JR.
--------------------------
STEPHEN R. HALPIN, JR.
DIRECTOR,
EXECUTIVE VICE PRESIDENT, TREASURER AND
CHIEF FINANCIAL OFFICER
(PRINCIPAL FINANCIAL OFFICER)
NOVEMBER 7, 1997 BY:/S/ JOEL A. FRIEDMAN
--------------------
JOEL A. FRIEDMAN
SENIOR VICE PRESIDENT AND
CONTROLLER
(PRINCIPAL ACCOUNTING OFFICER)
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 3,877,149
<SECURITIES> 0
<RECEIVABLES> 302,412,398
<ALLOWANCES> 29,068
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 306,753,294
<CURRENT-LIABILITIES> 5,547,281
<BONDS> 0
0
15,000,000
<COMMON> 100
<OTHER-SE> 286,205,913
<TOTAL-LIABILITY-AND-EQUITY> 306,753,294
<SALES> 0
<TOTAL-REVENUES> 17,357,183
<CGS> 0
<TOTAL-COSTS> 1,144,008
<OTHER-EXPENSES> 11,671,875
<LOSS-PROVISION> 35,287
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 16,177,888
<INCOME-TAX> 0
<INCOME-CONTINUING> 16,177,888
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 16,177,888
<EPS-PRIMARY> 45,060.13
<EPS-DILUTED> 0
</TABLE>
