<PAGE>
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X} QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1997
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 0-28706
--------
FIRST ALLIANCE CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 33-0721183
- -------------------- ---------------------
(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
17305 Von Karman Avenue, Irvine, California 92614
-------------------------------------------------
(Address of principal executive offices including ZIP Code)
(714) 224-8500
--------------
(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 __
As of July 21, 1997 registrant had outstanding 3,787,098 shares of Class
A Common Stock and 10,750,000 shares of Class B Common Stock, respectively.
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<PAGE>
FIRST ALLIANCE CORPORATION
INDEX
Page
----
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Statements of Financial Condition
(Unaudited) as of June 30, 1997 and
December 31, 1996.................................... 1
Consolidated Statements of Income (Unaudited)
for the quarters and six months ended June 30,
1997 and 1996........................................ 2
Consolidated Statements of Cash Flows (Unaudited)
for the quarters and six months ended June 30, 1997
and 1996.............................................. 3
Notes to Consolidated Financial Statements............ 5
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations ("MD&A").......... 7
PART II. OTHER INFORMATION
Item 1. Legal Proceedings..................................... 14
Item 2. Changes in Securities................................. 14
Item 3. Defaults Upon Senior Securities....................... 14
Item 4. Submission of Matters to a Vote of Security Holders... 14
Item 5. Other Information..................................... 14
Item 6. Exhibits and Reports on Form 8-K
a. Exhibits.................................... 15
b. Reports on Form 8-K......................... 15
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
FIRST ALLIANCE CORPORATION
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Dollars in thousands)
June 30, December 31,
1997 1996
----------- -----------
(Unaudited)
ASSETS
Cash and cash equivalents.......................... $ 17,093 $ 27,414
Receivable from trusts............................. 3,593 2,671
Loans held for sale................................ 18,075 11,023
Warehouse financing receivable..................... 7,233
Loans receivable held for investment............... 2,205 2,432
Residual interests in securities-at fair value..... 37,377 29,253
Mortgage servicing rights.......................... 7,207 6,025
Property, net...................................... 4,775 3,098
Deferred taxes..................................... 911 3,101
Real estate owned, net............................. 242 312
Prepaid expenses and other assets.................. 1,263 2,128
----------- -----------
Total assets................................... $ 99,974 $ 87,457
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Accounts payable and accrued liabilities........... $ 5,320 $ 3,952
Income taxes payable............................... 6,094 5,396
Notes payable...................................... 109 131
----------- -----------
Total liabilities.............................. 11,523 9,479
----------- -----------
Commitments and contingencies
Stockholders' equity:
Preferred Stock, $.01 par value per share;
1,000,000 shares authorized; no shares
outstanding....................................
Class A Common Stock, $.01 par value per share;
25,000,000 shares authorized; shares issued
and outstanding: 4,044,024 at June 30, 1997;
4,025,000 at December 31, 1996................. 40 40
Class B Common Stock, $.01 par value per share;
15,000,000 shares authorized; shares issued
and outstanding: 10,750,000 at June 30,1997
and December 31, 1996.......................... 108 108
Additional paid in capital......................... 65,041 64,643
Retained earnings.................................. 29,888 14,338
Treasury stock-at cost: 259,500 shares at
June 30, 1997.................................. (5,612)
Deferred stock compensation........................ (1,011) (1,113)
Foreign currency translation....................... (3) (38)
----------- -----------
Total stockholders' equity...................... 88,451 77,978
----------- -----------
Total liabilities and stockholders' equity.... $ 99,974 $ 87,457
=========== ===========
See notes to consolidated financial statements.
1
<PAGE>
<TABLE>
FIRST ALLIANCE CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands except per share amounts)
<CAPTION>
For the Quarter For the Six Months
Ended June 30, Ended June 30,
--------------------------- ---------------------------
1997 1996 1997 1996
------------ ------------ ------------ ------------
(Unaudited)
<S> <C> <C> <C> <C>
REVENUE:
Loan origination and sale............. $ 16,382 $ 11,880 $ 31,786 $ 21,251
Loan servicing and other fees......... 1,911 2,244 3,855 4,487
Interest and other.................... 4,951 2,900 9,040 6,096
------------ ------------ ------------ ------------
Total revenue...................... 23,244 17,024 44,681 31,834
EXPENSE:
Compensation and benefits............. 4,630 3,531 8,906 6,727
Advertising........................... 1,499 818 2,657 1,758
Professional services and other fees.. 838 466 1,448 927
Rent.................................. 433 372 833 742
Supplies.............................. 665 306 1,095 641
Depreciation and amortization......... 207 178 376 317
Interest.............................. 400 1,024 712 1,787
Legal................................. 551 306 779 452
Travel and training................... 360 244 710 409
Other................................. 493 473 1,137 908
------------ ------------ ------------ ------------
Total expense......................... 10,076 7,718 18,653 14,668
------------ ------------ ------------ ------------
INCOME BEFORE INCOME TAX PROVISION....... 13,168 9,306 26,028 17,166
INCOME TAX PROVISION..................... 5,302 139 10,478 257
------------ ------------ ------------ ------------
NET INCOME............................... $ 7,866 $ 9,167 $ 15,550 $ 16,909
============ ============ ============ ============
NET INCOME PER SHARE..................... $ 0.53 $ 0.86 $ 1.05 $ 1.59
============ ============ ============ ============
Weighted average number of common
shares outstanding.................... 14,714,213 10,650,407 14,790,339 10,650,407
See notes to consolidated financial statements
</TABLE>
2
<PAGE>
<TABLE>
FIRST ALLIANCE CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
<CAPTION>
For the Quarter For the Six Months
Ended June 30, Ended June 30,
--------------------------- ---------------------------
1997 1996 1997 1996
------------ ------------ ------------ ------------
(Unaudited)
<S> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income.............................. $ 7,866 $ 9,167 $ 15,550 $ 6,909
Adjustments to reconcile net
income to net cash
(used in) provided by operating
activities:
Capitalized residual interests and
mortgage servicing rights.......... (5,413) (2,469) (10,388) (4,530)
Loan origination and sale
revenue - other.................... (11,537) (9,329) (22,049) (16,422)
Deferred income taxes................ (353) 2,190
Net accretion of residual interests
in securities...................... (365) 109 (216) 183
Deferred stock compensation.......... 51 102
Accretion of discounts on loan
receivable......................... (60) (80) (98) (136)
Amortization of mortgage servicing
rights............................. 692 449 1,298 789
Depreciation and amortization........ 207 178 376 317
Foreign currency transaction
(gain) loss........................ (88) 81
Loss on sales of real estate owned
and property....................... 6 156 39 136
Loans originated or purchased for
sale, net of loan fees................. (106,163) (72,226) (201,497) (140,638)
Sale of regular interests in
securities............................. 75,000 74,972 148,000 127,391
Proceeds from sale of loans............. 36,134 20,092 67,919 41,410
Changes in assets and liabilities:
Receivable from trusts............... 870 484 (922) (2,319)
Prepaid expenses and other assets.... 357 874 865 905
Accounts payable and accrued
liabilities........................ 954 (238) 1,364 (117)
Income taxes payable................. 1,287 772
------------ ------------ ------------ ------------
Net cash (used in) provided by
operating activities............ (555) 22,139 3,386 23,878
------------ ------------ ------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures.................... (1,237) (453) (2,051) (896)
Collections on loans receivable......... 374 515 781 757
Additions to real estate owned.......... (78) (166)
Net repayments (advances) on warehouse
financing receivable.................. 2,445 (7,233)
Proceeds from sales of real estate
owned and property.................... 361 726 361 794
------------ ------------ ------------ ------------
Net cash provided by (used in)
investing activities.................. 1,865 788 (8,308) 655
------------ ------------ ------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net repayments on warehouse financing
facilities............................ (117) (9,522) (7,740)
Payments on notes payable............... (102) (422) (104) (522)
Cash dividends.......................... (5,331) (11,432)
Proceeds from issuance of notes
payable to stockholder................ 1,000
Payments on notes payable to
stockholder........................... (1,000) (1,000)
Purchase of treasury stock.............. (5,612) (5,612)
Proceeds from exercise of stock options. 17 324
------------ ------------ ------------ ------------
Net cash used in financing activities... (5,814) (16,275) (5,392) (19,694)
------------ ------------ ------------ ------------
EFFECT OF EXCHANGE RATE CHANGES ON CASH. (12) (7)
------------ ------------ ------------ ------------
NET (DECREASE) INCREASE IN CASH
AND CASH EQUIVALENTS.................. (4,516) 6,652 (10,321) 4,839
CASH AND CASH EQUIVALENTS, beginning
of period............................. 21,609 2,206 27,414 4,019
------------ ------------ ------------ ------------
CASH AND CASH EQUIVALENTS, end of
period................................ $ 17,093 $ 8,858 $ 17,093 $ 8,858
============ ============ ============ ============
See notes to consolidated financial statements.
3
</TABLE>
<PAGE>
<TABLE>
FIRST ALLIANCE CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS-(Continued)
(Dollars in thousands)
<CAPTION>
For the Quarter For the Six Months
Ended June 30, Ended June 30,
--------------------------- ---------------------------
1997 1996 1997 1996
------------ ------------ ------------ ------------
(Unaudited)
<S> <C> <C> <C> <C>
SUPPLEMENTAL INFORMATION:
Interest paid.......................... $ 400 $ 1,041 $ 717 $ 1,842
============ ============ ============ ============
Income taxes paid...................... $ 4,367 $ 326 $ 7,534 $ 326
============ ============ ============ ============
SUPPLEMENTAL INFORMATION ON NONCASH
INVESTING AND FINANCING ACTIVITIES:
Exchange of loans for regular and residual
interests in securities.............. $ 75,002 $ 75,255 $ 148,003 $ 127,675
============ ============ ============ ============
Dividends declared and unpaid.......... $ 3,669
============
Distribution of S Distribution Notes... $ 44,020 $ 44,020
============ ============
See notes to consolidated financial statements.
4
</TABLE>
<PAGE>
FIRST ALLIANCE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE QUARTERS AND SIX MONTHS ENDED JUNE 30, 1997 AND 1996
NOTE 1. GENERAL
The accompanying unaudited consolidated financial statements, which
include the accounts of First Alliance Corporation ("FACO") and its
subsidiaries (collectively the "Company"), have been prepared in accordance
with the instructions to Form 10-Q and include all information and footnotes
required for interim financial statement presentation. All adjustments
(consisting only of various normal accruals) necessary to present fairly the
Company's consolidated financial position, results of operations and cash
flows have been made. All significant intercompany transactions and
balances have been eliminated and certain reclassifications have been made
to prior periods' consolidated financial statements to conform to the
current period presentation. The results of operations for the six months
ended June 30, 1997 are not necessarily indicative of the results of
operations to be expected for the year ending December 31, 1997.
The financial information provided herein, including the information
under the heading Item 2 "Management's Discussion and Analysis of Financial
Condition and Results of Operations" ("MD&A"), is written with the
presumption that the users of these interim consolidated financial
statements have read, or have access to, the Company's recent filing on Form
10-K which contains the latest available audited consolidated financial
statements and notes thereto, as of and for the period ended December 31,
1996, together with the MD&A for such period.
HEDGING ACTIVITIES
The Company regularly securitizes and sells fixed and variable rate
mortgage loans. As part of its interest rate risk management strategy, the
Company hedges its interest rate risk related to its loans held for sale and
origination commitments by selling short or selling forward United States
Treasury securities. For accounting purposes, short sales of United States
Treasury securities are not considered to be a hedge. Therefore, when
selling short United States Treasury securities, the Company has recognized
realized and unrealized gains and losses on hedging activities in the period
in which they occur. The Company classifies forward sales of United States
Treasury securities as hedges of specific loans held for sale and
commitments to fund loans to be held for sale. The gains and losses derived
from these transactions are deferred and included in the carrying amounts of
loans held for sale and are recognized in earnings upon sale of loans
hedged. There were no deferred gains or losses on hedging activities at
June 30, 1997 and December 31, 1996. Losses recognized on hedging
activities were $165,000 and $91,000 for the quarter and six months ended
June 30, 1997, respectively, and gains recognized on hedging activities were
$513,000 for the quarter and six months ended June 30, 1996.
STOCK REPURCHASE PROGRAM
In April 1997, the Board of Directors approved a stock repurchase program
under which the Company is authorized to purchase up to 1,000,000 shares of
its Class A Common Stock. During the quarter ended June 30, 1997, the
Company repurchased 259,500 shares of its common stock at a cost of $5.6
million.
RECENT ACCOUNTING PRONOUNCEMENTS
In February 1997, the Financial Accounting Standards Board ("FASB")
issued Statement of Accounting Standards ("SFAS") No. 128 "Earnings Per
Share" which is effective for annual and interim periods ending after
December 15, 1997. It supersedes the presentation of primary earnings per
share with a presentation of basic earnings per share which does not
consider the effect of common stock equivalents. The computation of diluted
earnings per share, which gives effect to all dilutive potential common
shares that were outstanding during the period, is consistent with the
computation of fully diluted earnings per share per Accounting Principles
Board Opinion No. 15. The adoption of this standard is not expected to have
a material effect on the Company's consolidated financial position or
results of operations.
5
<PAGE>
In June of 1997, the FASB issued SFAS No. 130 "Reporting Comprehensive
Income" which is effective for annual and interim periods ending after
December 15, 1997. This statement requires that all items that are required
to be recognized under accounting standards as comprehensive income be
reported in a financial statement that is displayed with the same prominence
as other financial statements.
In June of 1997, the FASB issued SFAS No. 131 "Disclosures about
Segments of an Enterprise and Related Information" which is effective for
annual and interim periods ending after December 15, 1997. This statement
establishes standards for the method that public entities use to report
information about operating segments in annual financial statements and
requires that those enterprises report selected information about operating
segments in interim financial reports issued to shareholders. It also
establishes standards for related disclosures about products and services,
geographical areas and major customers.
6
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
GENERAL
- -------
OVERVIEW
The Company is a financial services organization principally engaged in
mortgage loan origination, purchases, sales and servicing. Loans originated
by the Company primarily consist of fixed and adjustable rate loans secured
by first mortgages on single family residences. The Company originates
loans through its retail branch network which is currently comprised of four
offices in the United Kingdom and 27 offices in the United States, seven of
which are located in California, two of which are located in each of
Florida, Illinois, New York, New Jersey and Maryland and one of which is
located in each of Oregon, Washington, Colorado, Utah, Arizona, Ohio,
Massachusetts, Georgia, Virginia and Pennsylvania. In addition, the Company
purchases loans from qualified mortgage originators. The Company sells
loans to wholesale purchasers or securitizes them in the form of Real Estate
Mortgage Investment Conduit ("REMIC") trusts. A significant portion of the
Company's loan production is securitized with the Company retaining the
right to service the loans.
The Company's strategy of originating, as compared to purchasing, the
majority of its loan volume results in the generation of a significant
amount of loan origination fees. This income has allowed the Company to
generate positive operating cash flow. There can be no assurance, however,
that the Company's operating cash flow will continue to be positive in the
future.
Gains on servicing retained sales of loans through securitization
represent the difference between the net proceeds to the Company in the
securitization and the allocated cost of loans securitized. In accordance
with SFAS No. 125, the allocated cost of the loans securitized is determined
by allocating their acquisition cost (for purchased loans) or net carrying
value (for originated loans) between the loans securitized, the residual
interests retained by the Company and the mortgage servicing rights retained
by the Company, based upon their relative fair values. At origination, the
Company classifies the residual interests as trading securities and, as
such, records the residual interests at fair value. The difference between
the fair value and the allocated cost is recorded as a gain on sale of
securities and is included in loan origination and sale revenue.
The net proceeds of a securitization consist of the regular and residual
interests in the REMIC trust received by the Company net of transaction
costs. The regular interests are immediately sold for cash by the Company.
As the holder of the residual interests, the Company is entitled to receive
certain excess cash flows. These excess cash flows are the difference
between (a) principal and interest paid by borrowers and (b) the sum of (i)
pass-through principal and interest to be paid to holders of the regular
interests, (ii) trustee fees, (iii) third-party credit enhancement fees,
(iv) servicing fees and (v) loan losses. The Company's right to receive
these excess cash flows begins after certain overcollaterization
requirements, which are specific to each securitization and are used as a
means of credit enhancement, have been met.
The Company's retained right to service loans entitles the Company to
receive servicing fees, prepayment penalties and other miscellaneous fees
associated with the collection of such loans.
RECENT DEVELOPMENTS
In June 1997 the Company entered into an agreement to acquire Standard
Pacific Savings, F.A. ("Savings"), a federally chartered thrift based in
Newport Beach, California. The estimated value of the transaction is
expected to be $9.0 million, with the final value to be $0.6 million in
excess of the stockholder's equity at the date of acquisition. Savings will
provide the Company with a platform for issuing credit card and other
financial services products. The acquisition is subject to the approval of
the Office of Thrift Supervision.
In July 1997 the Company entered into an agreement with Mego Mortgage
Corporation ("Mego") under which the Company will originate loan products
for purposes of debt consolidation and/or home improvement at up to 125%
loan-to-value ("High LTV Loans"), according to Mego's underwriting
guidelines. The Company will sell such High LTV Loans on a servicing-
released basis to Mego at funding.
7
<PAGE>
In February, 1997 the Company entered into an affinity credit card
relationship with Fidelity Federal Bank, a Federal Savings Bank
("Fidelity"). Under this relationship, Fidelity will issue credit cards
that bear the Company's name and that the Company will market and service.
Fidelity will fund the affinity card balances, on which it will earn a yield
guaranteed by the Company. Fidelity will pay the Company for its
solicitation services, customer service and collections and for the credit
enhancement of the credit card balances provided by the Company. Under the
terms of this credit enhancement, the Company has indemnified Fidelity for
losses it may suffer as a result of the affinity card program.
LOAN ORIGINATIONS AND PURCHASES
<TABLE>
<CAPTION>
At or for the Quarter At or for the Six Months
Ended June 30, Ended June 30,
---------------------- -------------------------
1997 1996 1997 1996
---------- ---------- ---------- ----------
(Dollars in thousands)
<S> <C> <C> <C> <C>
Loan originations and purchases:
Retail originations............................ $ 92,146 $ 72,868 $ 181,681 $ 135,147
Wholesale purchases............................ 22,659 7,336 38,441 20,791
---------- ---------- ---------- ----------
Total.......................................... $ 114,805 $ 80,204 $ 220,122 $ 155,938
========== ========== ========== ==========
Number of retail branches as of the end of the
period:
United States:
California................................... 7 6
Other states................................. 19 13
United Kingdom................................. 3
---------- ----------
Total........................................ 29 19
========== ==========
Weighted average initial interest rate............ 9.5% 9.8% 9.4% 9.5%
Weighted average initial combined loan-to
-value ratio.................................... 63.3% 62.6% 63.5% 62.4%
Average retail origination loan size.............. $ 86 $ 85 $ 87 $ 83
</TABLE>
For the quarter and six months ended June 30, 1997, originations and
purchases increased 43% and 41%, respectively, as compared to the
corresponding periods in 1996. Retail originations increased 26% and 34%
for the quarter and six months ended June 30, 1997, respectively, as
compared to the corresponding periods in 1996, primarily as a result of
origination volume from new retail branch offices opened in 1997 and 1996.
Wholesale purchases for the quarter and six months ended June 30, 1997
increased 209% and 85%, respectively, as compared to the corresponding
periods in 1996, as increased premiums available in the secondary market
allowed the Company to purchase and sell wholesale loans profitably. Prior
to 1997, all wholesale purchases were securitized by the Company.
LOAN SALES
<TABLE>
<CAPTION>
For the Quarter For the Six Months
Ended June 30, Ended June 30,
---------------------- -------------------------
1997 1996 1997 1996
---------- ---------- ---------- ----------
(Dollars in thousands)
<S> <C> <C> <C> <C>
Securitizations................................... $ 75,002 $ 75,255 $ 148,003 $ 127,675
Whole loan sales.................................. 35,416 20,426 66,518 42,400
---------- ---------- ---------- ----------
Total.......................................... $ 110,418 $ 95,681 $ 214,521 $ 170,075
========== ========== ========== ==========
</TABLE>
Loan sales, including securitizations of loans, for the quarter and six
months ended June 30, 1997 increased 15% and 26% over the corresponding
periods in 1996. The increases in loan sales for the quarter and six months
ended June 30, 1997 are the result of sales of the increased volume of loan
originations and purchases.
8
<PAGE>
COMPOSITION OF REVENUE AND EXPENSE
The following table summarizes certain components of the Company's
consolidated statements of income set forth as a percentage of total revenue
for the periods indicated:
<TABLE>
<CAPTION>
For the Quarter For the Six Months
Ended June 30, Ended June 30,
----------------------- -----------------------
1997 1996 1997 1996
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
REVENUE:
Loan origination and sale:
Gain on sale of loans....................... 23.4% 10.9% 23.4% 10.2%
Net loan origination and other fees......... 47.1 58.9 47.8 56.5
Loan servicing and other fees.................. 8.2 13.2 8.6 14.1
Interest and other............................. 21.3 17.0 20.2 19.2
---------- ---------- ---------- ----------
Total revenue............................... 100.0 100.0 100.0 100.0
---------- ---------- ---------- ----------
EXPENSE:
Compensation and benefits...................... 19.9 20.7 19.9 21.1
Advertising.................................... 6.4 4.8 5.9 5.5
Professional services and other fees........... 3.6 2.7 3.2 2.9
Rent........................................... 1.9 2.2 1.9 2.3
Supplies....................................... 2.9 1.8 2.5 2.0
Depreciation and amortization.................. 0.9 1.0 0.8 1.0
Interest....................................... 1.7 6.0 1.6 5.6
Legal.......................................... 2.4 1.8 1.7 1.4
Travel and training............................ 1.5 1.4 1.6 1.3
Other.......................................... 2.1 2.9 2.6 3.0
---------- ---------- ---------- ----------
Total expense............................... 43.3 45.3 41.7 46.1
---------- ---------- ---------- ----------
Income before income tax provision................ 56.7 54.7 58.3 53.9
Income tax provision (1).......................... 22.9 0.9 23.5 0.8
---------- ---------- ---------- ----------
Net income........................................ 33.8% 53.8% 34.8% 53.1%
=========== ========= ========== ==========
</TABLE>
(1) As a result of the Company's Initial Public Offering, completed in
July 1996, the Company's tax status changed from that of an S corporation to
that of a C corporation. As a C corporation, the Company is subject to
Federal and state income taxes. As an S corporation, the Company's taxable
income was included in the individual returns of the stockholders, and the
Company was only subject to certain state taxes, primarily in California.
RESULTS OF OPERATIONS
- ---------------------
REVENUE
The following table sets forth the components of the Company's revenue
for the periods indicated:
<TABLE>
<CAPTION>
For the Quarter For the Six Months
Ended June 30, Ended June 30,
----------------------- -----------------------
1997 1996 1997 1996
---------- ---------- ---------- ----------
(Dollars in thousands)
<S> <C> <C> <C> <C>
Loan origination and sale:
Gain on sale of loans (1)................... $ 5,442 $ 1,852 $ 10,436 $ 3,256
Net loan origination and other fees......... 10,940 10,028 21,350 17,995
Loan servicing and other fees.................. 1,911 2,244 3,855 4,487
Interest and other............................. 4,951 2,900 9,040 6,096
---------- ---------- ---------- ----------
Total revenue..................................... $ 23,244 $ 17,024 $ 44,681 $ 31,834
========== ========== ========== ==========
</TABLE>
(1) Excluding net loan origination and other fees.
9
<PAGE>
Total revenue increased 36.5% or $6.2 million and 40.4% or $12.8 million
for the quarter and six months ended June 30, 1997, respectively, as
compared to the corresponding periods in 1996 primarily due to higher loan
origination and sale revenue and higher interest income from residual
interests and loans held for sale.
Loan origination and sale revenue increased $4.5 million to $16.4 million
and $10.5 million to $31.8 million for the quarter and six months ended June
30, 1997, respectively, from the corresponding periods in 1996, primarily
due to increases in loan sales and increases in premiums received on loan
sales.
Gain on sale of loans increased $3.6 million and $7.2 million for the
quarter and six months ended June 30, 1997, respectively, from the
corresponding periods in 1996 as a result of increases in the volume of
loans sold and increases in the weighted average gain on sale of loans. The
weighted average gain on sale of loans as a percentage of loan principal
balances sold increased to 4.9% for each of the quarter and six months ended
June 30, 1997 from 1.9% for each of the corresponding periods in 1996. Gain
on sales of securitized loans increased to 5.3% and 5.2% for the quarter and
six months ended June 30, 1997, respectively, from 2.5% and 2.3% for the
quarter and six months ended June 30, 1996, respectively. These increases
are primarily due to increases in the weighted average initial interest rate
spreads (the difference between the initial weighted average loan interest
rates for the loans included in the securitization and the initial weighted
average pass-through rates paid to holders of regular interests in the
securitization) for residual interests originated to 3.3% and 3.2% for the
quarter and six months ended June 30, 1997, respectively, from 2.5% for the
quarter and six months ended June 30, 1996. In addition, the weighted
average gain on whole loan sales increased to 4.2% and 4.1% for the quarter
and six months ended June 30, 1997, respectively, as compared to 0.1% and
0.6% for the quarter and six months ended June 30, 1996. The Company's
whole loan sales consist of bulk sales, for which the Company receives a
premium over the principal balance of the loans, and flow sales, which
represent sales of smaller groups of loans, which the Company generally
sells for the principal balance of the loans. The increase in the weighted
average gain on whole loan sales is primarily a result of increases in
premiums available in the secondary market and increases in the percentage
of whole loan sales sold through bulk sales.
During the quarter and six months ended June 30, 1997 net loan
origination and other fees increased 9% and 19%, respectively, due
primarily to increases in sales of retail originations of 9% and 23%,
respectively.
Loan servicing and other fees as an annualized percentage of the average
servicing portfolio decreased to 1.1% and 1.2% for the quarter and six
months ended June 30, 1997, respectively, as compared to 1.5% for each of
the corresponding periods in 1996. As an annualized percentage of the
average servicing portfolio, both servicing fees and prepayment penalties
decreased by 0.1% and the amortization of mortgage servicing rights
increased by 0.1% for each of the quarter and six months ended June 30, 1997
as compared to the corresponding periods in 1996. The Company earns higher
servicing fees on loans serviced for private investors and for certain
securitizations originated prior to 1996 as compared to loans serviced for
securitizations originated since 1996. As the proportion of loans serviced
for private investors and securitizations originated prior to 1996 decreases
as a percentage of the total servicing portfolio, the Company's weighted
average servicing fee has decreased. The decrease in prepayment penalties
is primarily the result of decreases in the level of prepayments received
during the six months ended June 30, 1997 as compared to the six months
ended June 30, 1996. The increase in the amortization of mortgage servicing
rights was primarily due to the adoption in January of 1995 of SFAS No. 122,
"Accounting For Mortgage Servicing Rights," which requires the Company to
capitalize the fair value of originated mortgage servicing rights and
amortize the capitalized amount over the life of such assets.
Interest income increased 72% to $4.9 million and 50% to $9.0 million for
the quarter and six months ended June 30, 1997, respectively, from $2.9
million and $6.0 million for the quarter and six months ended June 30, 1996,
respectively. As a result of increases in the average balance of loans held
for sale, interest income from loans held for sale increased $0.9 million
and $1.2 million for the quarter and six months ended June 30, 1997,
respectively. Interest income from residual interests increased $0.8
million and $0.9 million for the quarter and six months ended June 30, 1997,
respectively, primarily due to an increase in the average balance of
residual interests for the six months ended June 30, 1997 as compared to the
corresponding period in 1996. Additionally, interest income from
investments increased $0.4 million and $0.9 million for the quarter and six
months ended June 30, 1997, respectively. These increases were primarily
attributable to increases in the balance of available cash as a result of
the net proceeds from the Company's July 1996 Initial Public Offering and
cash generated from operations. Cash and cash equivalents increased from
$4.0 million at December 31, 1995 to $17.1 million at June 30, 1997.
10
<PAGE>
EXPENSE
The following table sets forth the components of the Company's expense
for the periods indicated:
<TABLE>
<CAPTION>
For the Quarter For the Six Months
Ended June 30, Ended June 30,
----------------------- -----------------------
1997 1996 1997 1996
---------- ---------- ---------- ----------
(Dollars in thousands)
<S> <C> <C> <C> <C>
Compensation and benefits..................... $ 4,630 $ 3,531 $ 8,906 $ 6,727
Advertising................................... 1,499 818 2,657 1,758
Professional services and other fees.......... 838 466 1,448 927
Rent.......................................... 433 372 833 742
Supplies...................................... 665 306 1,095 641
Depreciation and amortization................. 207 178 376 317
Interest...................................... 400 1,024 712 1,787
Legal......................................... 551 306 779 452
Travel and training........................... 360 244 710 409
Other......................................... 493 473 1,137 908
---------- ---------- ---------- ----------
Total expense.............................. $ 10,076 $ 7,718 $ 18,653 $ 14,668
========== ========== ========== ==========
</TABLE>
Total expense increased 31% to $10.1 million for the second quarter of
1997 from $7.7 million for the second quarter of 1996 and 27% to $18.7
million for the six months ended June 30, 1997 from $14.7 million for the
corresponding period in 1996. These increases are primarily due to increases
in compensation and benefits and advertising related to the Company's
increased retail loan origination operations. These increases were offset
by decreased interest expense.
Compensation and benefits increased $1.1 million and $2.2 million for the
quarter and six months ended June 30, 1997, respectively, as compared to the
corresponding periods in 1996. These increases are a result of an increase
in personnel to support the Company's retail branch office expansion.
Advertising expense increased 83% and 51% for the quarter and six months
ended June 30, 1997, respectively, as compared to the corresponding periods
in 1996. These increases relate to increased marketing activities resulting
from the Company's retail branch office expansion.
Professional services and other fees increased $0.4 million and $0.5
million for the quarter and six months ended June 30, 1997, respectively, as
compared to the corresponding periods in 1996 primarily due to increases in
recruiting costs associated with the Company's ongoing retail branch office
expansion and increases in costs associated with management of delinquent
loans and foreclosure activities.
Interest expense decreased $0.6 million and $1.1 million for the quarter
and six months ended June 30, 1997, respectively, as compared to the quarter
and six months ended June 30, 1996. The additional cash and cash
equivalents available at the beginning of the first quarter of 1997 were
used to fund loan originations and purchases resulting in decreases in the
average balance outstanding on the warehouse financing facility in the first
six months of 1997 as compared to the corresponding period in 1996. In
addition, during the second quarter of 1996 the Company paid interest on an
S distribution note of $0.4 million. No such notes were outstanding in
1997.
The increases in supplies, legal and travel and training expenses for the
quarter and six months ended June 30, 1997 as compared to the corresponding
periods in 1996 is primarily due to the increased activity related to the
increase in the number of retail branch offices.
11
<PAGE>
SERVICING
The following tables provide data on loan delinquency, real estate owned
(REO) and net losses for the Company's servicing portfolio:
<TABLE>
<CAPTION>
As of
----------------------------------------------------------------------
June 30, 1997 December 31, 1996 June 30, 1996
--------------------- ----------------------- ----------------------
% of % of % of
(Dollars in Servicing (Dollars in Servicing (Dollars in Servicing
thousands) Portfolio thousands) Portfolio thousands) Portfolio
---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Servicing Portfolio.......... $ 692,243 $ 641,191 $ 603,851
========== ========== ==========
30-59 days delinquent........ $ 7,100 1.0% $ 9,359 1.5% $ 9,853 1.6%
60-89 days delinquent........ 5,350 0.8 6,704 1.0 7,257 1.2
90 days or more delinquent... 16,075 2.3 19,081 3.0 19,799 3.3
---------- ---------- ---------- ---------- ---------- ----------
Total delinquencies....... $ 28,525 4.1% $ 35,144 5.5% $ 36,909 6.1%
========== ========== ========== ========== ========== ==========
REO (1)................... $ 4,989 0.7% $ 3,951 0.6% $ 6,350 1.1%
========== ========== ========== ========== ========== ==========
</TABLE>
<TABLE>
<CAPTION>
For the Quarter For the Six Months
Ended June 30, Ended June 30,
----------------------- -----------------------
1997 1996 1997 1996
---------- ---------- ---------- ----------
(Dollars in thousands)
<S> <C> <C> <C> <C>
Average servicing portfolio balance
outstanding (2)................................. $ 679,200 $ 607,785 $ 666,437 $ 610,270
Net losses (3).................................... 520 321 1,000 786
Percentage of average servicing portfolio
- annualized.................................... .31% .21% .30% .26%
______________
</TABLE>
(1) Includes REO of the Company as well as REO of the REMIC Trusts
serviced by the Company; however, excludes private investor REO not serviced
by the Company.
(2) Average servicing portfolio balance equals the quarterly average of
the servicing portfolio computed as the average of the balance at the
beginning and end of each quarter.
(3) Net losses means actual net losses realized with respect to the
disposition of REO.
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
Historically, the Company has generated positive cash flow. The
Company's sources of cash include loan sales, sales of regular interests,
borrowings under its warehouse financing facilities, distributions received
from residual interests, interest income and loan servicing income. The
Company's uses of cash include the funding of loan originations and
purchases, payments of interest, repayment of its warehouse financing
facilities, capital expenditures, operating and administrative expenses and
payment of income taxes. At origination of a loan, the Company includes the
loan origination fees in the principal balance, and, if not utilizing
available cash, borrows the approximate principal balance of the loan under
its warehouse financing facilities. As the amount funded to the borrower is
net of the loan origination fees, the Company generates cash approximating
the loan origination fees at the time of funding of the loan under the
warehouse financing facilities. Total cash generated from the sale of loans
and regular interests in securities is used to pay down the warehouse
financing facilities. As part of its cash management strategies, the
Company may utilize available cash to fund its loans held for sale. This
creates an inventory of loans on which the Company can immediately borrow
funds from its warehouse financing facilities. Cash provided by (used in)
operating activities plus the change in loans held for sale was $5.8 million
and $10.4 million for the quarter and six months ended June 30, 1997,
respectively, and $8.5 million and $11.9 million for the quarter and six
months ended June 30, 1996 respectively. The decrease in cash provided by
operating activities plus the change in loans held for sale for the quarter
and six months ended June 30, 1997 as compared to the corresponding periods
in 1996 was primarily due to the Company's status as an S Corporation in
1996. As an S corporation, the Company's taxable income was included in the
individual returns of the stockholders, and the Company was only subject to
certain state taxes, primarily in California.
12
<PAGE>
The Company's ability to continue to originate and purchase loans is
dependent upon adequate credit facilities and upon its ability to sell the
loans in the secondary market in order to generate cash proceeds for new
originations and purchases. The value of and market for the Company's loans
are dependent upon a number of factors, including general economic
conditions, interest rates and governmental regulations. Adverse changes in
such factors may affect the Company's ability to sell loans for acceptable
prices within a reasonable period of time. A prolonged, substantial
reduction in the size of the secondary market for loans of the type
originated or purchased by the Company may adversely affect the Company's
ability to sell loans in the secondary market with a consequent adverse
impact on the Company's results of operations, financial condition and
ability to fund future originations and purchases.
The Company's $125 million warehouse financing facility, which is secured
by loans originated or purchased by the Company and currently bears interest
at a rate of 0.80% over 30 day London Interbank Offered Rate ("LIBOR"),
expires on June 30, 1998. The Company's $25 million warehouse financing
facility, which is secured by loans originated or purchased by the Company
and currently bears interest at a rate of 0.80% over 30 or 90 day LIBOR,
expires on March 5, 1998. Management expects, although there can be no
assurance, that the Company will be able to maintain these warehouse
financing facilities (or obtain replacement or additional financing) in the
future.
In February 1997 the Company entered into agreements to provide warehouse
financing facilities to two mortgage banking companies ("Borrowers") that
were controlled by related parties. These lines of credit are secured by
loans originated by the Borrowers and by personal guarantees provided by
stockholders of the Borrowers, bear interest at 10%, have a combined
borrowing limit of $15 million and expire on July 31, 1998. As of June 30,
1997, an aggregate of $7.2 million was outstanding on these lines.
In connection with its stock repurchase program, the Company repurchased
259,500 shares of its Class A Common Stock for $5.6 million during the
second quarter of 1997.
As of June 30, 1997 the Company had commitments to fund loans of $6.1
million. Historically, approximately 55% of such commitments have
ultimately been funded. Capital expenditures totaled $1.2 million and $2.1
million for the quarter and six months ended June 30, 1997, respectively,
and $0.5 million and $0.9 million for the corresponding period in 1996. In
July 1997, the Company purchased an office building for $3.4 million. This
facility will be used by the Company's telemarketing operations which are
currently located in the two leased offices.
The estimated purchase price for Savings of $9.0 million is expected to
be funded by the Company from available cash.
As an S corporation, the Company paid dividends, including amounts to be
used by the stockholders for the payment of personal income taxes on the
earnings of the S corporation, of $6.1 million for the six months ended June
30, 1996. In addition, in 1996, in anticipation of the termination of the
Company's S corporation status at the time of the Initial Public Offering,
the Company distributed S distribution notes to the stockholders of the
Company totaling $45.0 million. Proceeds from the Initial Public Offering
were used to pay the S distribution notes in 1996. Since the completion of
the Company's Initial Public Offering in July 1996 the Company has been
taxed as a C corporation and no dividends have been declared.
13
<PAGE>
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Not Applicable.
ITEM 2. CHANGES IN SECURITIES
Not Applicable.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not Applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not Applicable.
ITEM 5. OTHER INFORMATION
Not Applicable.
14
<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Exhibit
No. Description of Exhibit
--- ----------------------
3.1 Certificate of Incorporation of the Company (Incorporated by
reference to Exhibit 3.1 to the Company's Registration Statement on
Form S-1, Commission File No. 333-3633)
3.2 Bylaws of the Company (Incorporated by reference to Exhibit 3.2 to
the Company's Registration Statement on Form S-1, Commission File
No. 333-3633)
4.1 1996 Stock Incentive Plan (Incorporated by reference to Exhibit 4.1
to the Company's Registration Statement on Form S-1, Commission File
No. 333-3633)
4.1.1 Form of Incentive Stock Option Agreement for use with 1996 Stock
Incentive Plan (Incorporated by reference to Exhibit 4.1.1 to the
Company's Annual Report on Form 10-K for the year ended December 31,
1996, Commission File No. 0-28706)
4.1.2 Form of Non-qualified Stock Option Agreement for use with 1996 Stock
Incentive Plan (Incorporated by reference to Exhibit 4.1.2 to the
Company's Annual Report on Form 10-K for the year ended December 31,
1996, Commission File No. 0-28706)
10.1 Warehouse Financing Facility dated October 29, 1993 (Incorporated
by reference to Exhibit 10.1 to the Company's Registration Statement
on Form S-1, Commission File No. 333-3633)
10.2 Form of Pooling and Servicing Agreement (Incorporated by reference
to Exhibit 10.2 to the Company's Registration Statement on Form S-1,
Commission File No. 333-3633)
10.3 Corporate Headquarters Lease (Incorporated by reference to Exhibit
10.3 to the Company's Registration Statement on Form S-1, Commission
File No. 333-3633)
10.4 S Distribution Notes (Incorporated by reference to Exhibit 10.4 to
the Company's Registration Statement on Form S-1, Commission File
No. 333-3633)
10.5 Mason Employment Agreement (Incorporated by reference to Exhibit
10.5 to the Company's Registration Statement on Form S-1, Commission
File No. 333-3633)
10.5.1 Mason Loan (Incorporated by reference to Exhibit 10.5.1 of the
Company's Annual Report on Form 10-K for the year ended December 31,
1996, Commission File No. 0-28706)
10.6 Form of Directors' and Officers' Indemnity Agreement (Incorporated
by reference to Exhibit 10.7 to the Company's Registration Statement
on Form S-1, Commission File No. 333-3633)
10.7 Mortgage Loan Purchase and Sale Agreement dated as of July 1, 1996
between Nationscapital Mortgage Corporation and the Company
(Incorporated by reference to Exhibit 10.7 to the Company's
Quarterly Report on Form 10-Q for the period ended March 31, 1997,
Commission File No. 0-28706)
10.8 Mortgage Loan Purchase and Sale Agreement dated as of July 1, 1996
between Coast Security Mortgage Inc. and the Company (Incorporated
by reference to Exhibit 10.8 to the Company's Quarterly Report on
Form 10-Q for the period ended March 31, 1997, Commission File No.
0-28706)
10.9 Chisick Employment Agreement (Incorporated by reference to Exhibit
10.10 to the Company's Registration Statement on Form S-1,
Commission File No. 333-3633)
10.10 Reimbursement Agreement (Incorporated by reference to Exhibit 10.11
to the Company's Registration Statement on Form S-1, Commission File
No. 333-3633)
10.11 Warehouse Financing Facility dated September 5, 1996 (Incorporated
by reference to Exhibit 10.12 to the Company's Quarterly Report on
Form 10-Q for the period ended September 30, 1996, Commission File
No. 0-28706)
10.12 Interim Warehouse and Security Agreement dated as of February 15,
1997 between Nationscapital Mortgage Corporation and the Company
(Incorporated by reference to Exhibit 10.12 to the Company's
Quarterly Report on Form 10-Q for the period ended March 31, 1997,
Commission File No. 0-28706)
10.13 Interim Warehouse and Security Agreement dated as of February 15,
1997 between Coast Security Mortgage Inc. and the Company
(Incorporated by reference to Exhibit 10.13 to the Company's
Quarterly Report on Form 10-Q for the period ended March 31, 1997,
Commission File No. 0-28706)
10.14 Smith Loan (Incorporated by reference to Exhibit 10.14 to the
Company's Quarterly Report on Form 10-Q for the period ended March
31, 1997, Commission File No. 0-28706)
11.1 Statement re: computation of net income per share for the quarters
and six months ended June 30, 1997 and 1996*
27 Financial Data Schedule*
_________________________
* Filed herewith.
15
<PAGE>
(b) 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, thereunto duly authorized.
FIRST ALLIANCE CORPORATION
Registrant
Date: 7/31/97 /s/ BRIAN CHISICK
--------------------- ----------------------------
Brian Chisick
President and Chief Executive Officer
Date: 7/31/97 /s/ MARK MASON
--------------------- ----------------------------
Mark K. Mason
Executive Vice President
Principal Financial Officer
16
<PAGE>
EXHIBIT 11.1 COMPUTATION OF NET INCOME PER SHARE
<TABLE>
FIRST ALLIANCE CORPORATION
COMPUTATION OF NET INCOME PER SHARE
FOR THE QUARTERS AND SIX MONTHS ENDED JUNE 30, 1997
(Dollars in thousands except per share amounts)
<CAPTION>
For the Quarter Ended For the Six Months Ended
June 30, June 30,
-------------------------- --------------------------
1997 1996 1997 1996
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
DATA AS TO EARNINGS - Net Income............. $ 7,866 $ 9,167 $ 15,550 $ 16,909
DATA AS TO NUMBER OF COMMON AND COMMON
EQUIVALENT SHARES - PRIMARY NET INCOME
PER SHARE
Weighted average number of shares outstanding
Class A and Class B Common Stock......... 14,632,947 10,750,000 14,708,869 10,750,000
Reduction of outstanding shares assuming
average balance of deferred stock
compensation plus tax benefits credited
to capital on assumed exercise used as
proceeds invested in treasury stock (at
average market prices during each period). (54,117) (99,593) (53,430) (99,593)
Common equivalent shares assuming issuance
of shares represented by outstanding stock
options:
Additional shares assumed to be issued.... 520,159 521,557
Reduction of such additional shares
assuming proceeds plus tax benefits
credited to capital on assumed exercise
invested in treasury stock (at average
market prices during each period)...... (436,929) (421,156)
------------ ------------ ------------ ------------
Weighted average number of common and common
equivalent shares outstanding............ 14,662,060 10,650,407 14,755,840 10,650,407
============ ============ ============ ============
PRIMARY NET INCOME PER SHARE................. $ 0.54 $ 0.86 $ 1.05 $ 1.59
============ ============ ============ ============
DATA AS TO NUMBER OF COMMON AND COMMON
EQUIVALENT SHARES - FULLY DILUTED NET INCOME
PER SHARE:
Weighted average number of shares outstanding
Class A and Class B Common Stock.......... 14,632,947 10,750,000 14,708,869 10,750,000
Reduction of outstanding shares assuming
ending balance of deferred stock
compensation plus tax benefits credited
to capital on assumed exercise used as
proceeds invested in treasury stock (at
market prices at the end of each period).. (47,987) (99,593) (47,987) (99,593)
Common equivalent shares assuming issuance
of shares represented by outstanding stock
options:
Additional shares assumed to be issued.... 520,159 521,557
Reduction of such additional shares
assuming proceeds plus tax benefits
credited to capital on assumed exercise
invested in treasury stock (at market
prices at the end of each period)......... (390,906) (392,100)
------------ ------------ ------------ ------------
Weighted average number of common and
common equivalent shares outstanding 14,714,213 10,650,407 14,790,339 10,650,407
============= =========== ============ ============
FULLY DILUTED NET INCOME PER SHARE........... $ 0.53 $ 0.86 $ 1.05 $ 1.59
============= =========== ============ ============
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 17,093
<SECURITIES> 0
<RECEIVABLES> 10,826
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 47,257
<PP&E> 4,775
<DEPRECIATION> 0
<TOTAL-ASSETS> 99,974
<CURRENT-LIABILITIES> 11,414
<BONDS> 0
0
0
<COMMON> 148
<OTHER-SE> 88,303
<TOTAL-LIABILITY-AND-EQUITY> 99,974
<SALES> 31,786
<TOTAL-REVENUES> 44,681
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 18,653
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 712
<INCOME-PRETAX> 26,028
<INCOME-TAX> 10,478
<INCOME-CONTINUING> 15,550
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 15,550
<EPS-PRIMARY> 1.05
<EPS-DILUTED> 1.05
</TABLE>
