<PAGE> 1
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the period ended: March 31, 1998
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Commission File Number 000-22567
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THE WMF GROUP, LTD.
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(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
Delaware 54-1647759
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(State or other jurisdiction of (I.R.S Employer
incorporation or organization) identification no.)
</TABLE>
<TABLE>
<S> <C>
1593 Spring Hill Road, Suite 400, Vienna, Virginia 22182
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(Address of principal executive offices) (Zip code)
</TABLE>
Registrant's telephone number, including are code (703) 610-1400
----------------
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 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
--- ---
Common Stock, $.01 par value, outstanding as of May 15, 1998
5,254,525 Shares of Common Stock
<PAGE> 2
The WMF GROUP, LTD.
FORM 10-Q
INDEX
<TABLE>
<S> <C> <C>
Part I Financial Information
------ ----------------------
Item 1. Financial Statements.
Consolidated Balance Sheets
As of March 31, 1998 (unaudited) and December 31, 1997 1
Consolidated Statements of Operations for the
Three Months Ended March 31, 1998 and 1997 (unaudited), 2
Consolidated Statements of Cash Flows for the
Three Months Ended March 31, 1998 and 1997 (unaudited), 3
Notes to Unaudited Consolidated Financial Statements 4
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 6
Part II. Other Information
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Item 1. Legal Proceedings 11
Items 2 - 5 None 11
Item 6. Exhibits and Reports on Form 8-K 11
Signatures 13
</TABLE>
<PAGE> 3
PART I
ITEM 1. FINANCIAL STATEMENTS
The WMF GROUP, LTD.
Consolidated Balance Sheets
(dollars in thousands, except per share data)
<TABLE>
<CAPTION>
As of As of
March 31, December 31,
1998 1997
---- ----
(Unaudited)
ASSETS
<S> <C> <C>
Cash and cash equivalents 21,976 $10,786
Restricted cash equivalents 2,086 1,576
Mortgage-backed securities, at amortized cost, pledged 3,836 3,851
Mortgage loans held for sale, pledged 56,107 49,431
Principal, interest and other servicing advances 2,367 2,631
Furniture, equipment and leasehold improvements, net 3,206 2,299
Servicing rights, net 27,620 26,796
Goodwill, net 22,360 18,465
Other assets 3,161 3,496
-------- --------
Total assets $142,719 $119,331
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Accounts payable and accrued expenses 3,601 $5,730
Warehouse lines of credit 55,001 48,743
Servicing acquisition line of credit 5,212 5,462
Revolving credit facility 23,348 5,699
Deferred fees 4,067 3,600
Accrued loan servicing losses 5,379 5,125
Other liabilities 1,090 2,873
Deferred tax liability, net 3,357 3,274
-------- --------
Total liabilities 101,055 80,506
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Stockholders' equity:
Common stock, $.01 par value, 25,000,000
shares authorized; 5,188,721 and 5,042,723 issued and
outstanding, respectively 52 50
Additional paid-in capital 37,734 35,178
Retained earnings 3,878 3,597
------ -----
Total stockholders' equity 41,664 38,825
------ ------
-------- --------
Total liabilities and stockholders' equity $142,719 $119,331
======== ========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
1
<PAGE> 4
THE WMF GROUP, LTD.
Consolidated Statements of Operations
(dollars in thousands, except per share data)
(unaudited)
<TABLE>
<CAPTION>
Three Months Three Months
Ended Ended
March 31, March 31,
1998 1997
---- ----
<S> <C> <C>
Revenues:
Servicing fees $3,694 $2,726
Gain on sale of mortgage loans, net 5,233 2,407
Interest income 1,156 933
Placement fee income 2,061 1,125
Other income 1,144 249
----- ---
Total Revenues 13,288 7,440
------ -----
Expenses:
Salaries and employee benefits 6,271 3,557
General and administrative 3,073 1,272
Occupancy 838 528
Provision for loan servicing losses 254 174
Interest 578 253
Amortization of servicing rights 1,074 1,082
Depreciation and amortization 621 333
------ ------
Total Expenses 12,709 7,199
------ -----
Income before income tax expense 579 241
Income tax expense 298 174
--- ---
Net income $281 $67
==== ===
Net income per share - Basic $0.06 $ 0.02
===== =========
Net income per share - Diluted $0.05 $ 0.02
===== =========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
2
<PAGE> 5
THE WMF GROUP, LTD.
Consolidated Statements Of Cash Flows
(dollars in thousands)
(unaudited)
<TABLE>
<CAPTION>
Three Months Three Months
Ended Ended
March 31, March 31,
--------- ---------
1998 1997
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net income $281 $67
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization of furniture, equipment
and leasehold improvements 243 140
Amortization of mortgage servicing rights 1,074 1,082
Amortization of goodwill 378 193
Compensation related to stock options 160 -
Provision for loan servicing losses 254 174
Mortgage loans originated (601,013) (154,149)
Mortgage loans sold 594,337 165,729
Decrease (increase) in principal, interest and other servicing
advances 264 (254)
Increase in due to affiliates - 255
Increase in restricted cash equivalents (510) (97)
Decrease in other assets 342 646
Decrease in accounts payable and accrued expenses (2,206) (761)
Increase (decrease) in deferred fees 467 (310)
Decrease in other liabilities (1,783) (1,994)
------- ------
Net cash provided by (used in) operating activities (7,712) 10,721
------- ------
Cash flows from investing activities:
Purchase of furniture, equipment and leasehold improvements (1,142) (92)
Purchase of mortgage servicing rights (762) (1,089)
Origination of servicing rights (1,136) (284)
Assets acquired and liabilities assumed, net of cash (4,273) -
------- -------
Net cash used in investing activities (7,313) (1,465)
------- -------
Cash flows from financing activities:
Repayment of servicing acquisition line of credit (250) -
Increase (decrease) in warehouse lines of credit, net 6,258 (11,640)
Increase in revolving credit facilities 17,649 -
Issuance of common stock and exercise of stock options 2,558 -
------ --------
Net cash (used) provided by financing activities 26,215 (11,640)
------ --------
Net increase (decrease) in cash 11,190 (2,384)
Cash at beginning of period 10,786 6,601
------ ------
Cash at end of period $21,976 $4,217
======= ======
Supplemental disclosures:
Cash paid during the period for interest $489 $158
Cash paid during the period for income taxes 336 -
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
3
<PAGE> 6
THE WMF GROUP, LTD.
Notes to unaudited consolidated financial statements
(dollar in thousands, except per share data)
1. ORGANIZATION:
The WMF Group, Ltd. (the "Company") is one of the largest independent
commercial mortgage bankers in the United States as measured by servicing
portfolio size based on the 1997 survey published by the Mortgage Bankers
Association of America ("MBA"), the largest originator of Federal National
Mortgage Association ("Fannie Mae") multifamily loans based on statistics
provided by Fannie Mae, and is the largest originator of Federal Housing
Authority ("FHA") insured multifamily and healthcare loans based on statistics
provided by Housing and Urban Development ("HUD"). The Company originates,
underwrites, structures, places, sells and services multifamily and commercial
real estate loans. With the formation of WMF Capital Corp. and WMF Carbon Mesa
Advisors, in the first quarter of 1998, the Company operates a commercial
mortgage conduit, manages commercial mortgage investment funds and provides
special asset management services. Through its relationships with Government
Sponsored Enterprises ("GSEs"), investment banks, life insurance companies,
commercial banks and other investors, the Company provides and arranges
financing to owners of multifamily and commercial real estate on a nationwide
basis using both a retail and wholesale network. The Company generates revenues
through origination fees, servicing fees, net interest income on loans held for
sale and placement fees. The Company expects that securitization trading
profits from WMF Capital Corp. and funds management fees from WMF Carbon Mesa
Advisors will provide the Company with additional sources of revenue.
The Company is a Delaware corporation formed in October 1992. The
Company has three direct wholly owned subsidiaries: Washington Mortgage
Financial Group, Ltd. ("Washington Mortgage"), WMF Capital Corp., and WMF
Carbon Mesa Advisors, which are incorporated under the laws of Delaware.
Washington Mortgage's wholly owned subsidiaries are WMF Huntoon, Paige
Associates Limited ("WMF Huntoon Paige"), WMF Proctor Ltd. ("WMF Proctor"), and
WMF Robert C. Wilson Ltd. ("WMF Robert C. Wilson"), which are incorporated
under the laws of the states of Delaware, Michigan and Texas, respectively.
2. BASIS OF PRESENTATION:
The consolidated financial statements include the accounts of the
Company and its wholly owned subsidiaries. All material intercompany balances
and transactions have been eliminated in consolidation.
The condensed consolidated financial statements of the Company at
March 31, 1998 and for the three month periods ended March 31, 1998 and 1997
included herein are unaudited, and include all adjustments necessary for the
fair presentation of the financial position, results of operations and cash
flows of the Company as of and for the periods presented. All such adjustments
are of a normal recurring nature. Interim results are not necessarily
indicative of results that may be expected for the full year.
3. BALANCE SHEET CLASSIFICATION:
The Company prepares its consolidated balance sheet using an
unclassified balance sheet presentation as is customary in the mortgage banking
industry. A classified presentation would have aggregated current assets,
current liabilities, and net working capital as follows:
<TABLE>
<CAPTION>
As of As of
March 31, December 31,
1998 1997
---- ----
<S> <C> <C>
Current assets $83,606 $65,922
Current liabilities 64,326 61,850
------ ------
Net working capital $19,280 $4,072
======= ======
</TABLE>
4
<PAGE> 7
4. LITIGATION:
The Company is involved in litigation related to the normal course of
its business. Management is of the opinion that the litigation will not have a
material adverse impact on the Company's financial position or operating
results. No amounts have been accrued because the loss, if any, cannot be
reasonably estimated.
5
<PAGE> 8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
All statements contained herein that are not historical facts,
including but not limited to statements regarding anticipated future capital
requirements, the Company's future development plans, the Company's ability to
obtain additional equity or other financing, and the Company's ability to
generate cash from operations and further savings from existing operations, are
based on current expectations. These statements are forward looking in nature
and involve a number of risks and uncertainties. Actual results may differ
materially. Among the factors that could cause actual results to differ
materially are the following: the availability of sufficient capital to finance
the Company's business plan on terms satisfactory to the Company; competitive
factors, such as the introduction of new competitors, future acquisitions and
strategic partnerships; general business and economic conditions; and the other
risk factors described from time to time in the Company's reports filed with
the Securities and Exchange Commission. The Company wishes to caution readers
not to place undue reliance on any such forward looking statements, which
statements are made pursuant to the Private Securities Litigation Reform Act of
1995 and, as such, speak only as of the date made.
OVERVIEW
The Company has experienced significant growth in its net income,
revenues, annual production volume and servicing volume. The Company seeks to
continue to expand its business through (i) acquisitions and internal growth;
(ii) design and delivery of new mortgage products; and (iii) expansion into
related businesses. On a going-forward basis, to the extent that the Company is
successful in completing acquisitions, the Company will experience increased
expenses associated with the amortization of goodwill and acquired mortgage
servicing rights and, if the acquisitions are financed by additional
indebtedness, an increase in interest expense. Through the acquisitions, the
Company's primary focus is to increase its mortgage origination capabilities
and servicing portfolio as well as to expand into related businesses.
Accordingly, such acquisitions may result in a short-term decrease in income
from operations during the period from acquisition through a period necessary
to integrate the acquired companies.
RESULTS OF OPERATIONS - SUMMARY
The Company's primary business activities are commercial and
multifamily loan servicing, loan origination and sales of the loans to
investors in the secondary market. With the formation of WMF Capital Corp.
and WMF Carbon Mesa, the Company operates a commercial mortgage conduit,
manages commercial mortgage investment funds and provides special asset
management services. Revenues from mortgage banking activities are earned from
the origination of commercial and multifamily real estate mortgage loans and
the servicing of such loans. The Company's revenue includes loan servicing
fees, gains on sale of mortgage loans (including related gains on originated
servicing rights), interest income on loans prior to sale, "placement fees"
(revenue earned relating to utilization of escrow funds), origination fee
income and other income. The addition of WMF Capital Corp. and WMF Carbon
Mesa are expected to add securitization trading profit and funds management
fees as a source of revenue.
The Company's revenue is significantly influenced by the timing of
origination, sales and securitization of mortgage loans and is somewhat
sensitive to economic factors such as the general level of interest rates and
demand for commercial and multifamily real estate. As a result, future revenues
may fluctuate due to changes in these factors. The Company expects that as it
expands into new businesses the sources of revenues will change. Therefore,
the Company's historical results may not be indicative of future periods.
6
<PAGE> 9
The following table sets forth information derived from the Company's
consolidated statements of operations for each of the periods presented:
Summary Financial Information
Results of Operations
(dollars in thousands)
<TABLE>
<CAPTION>
Three months Three months
Ended Ended
March 31, 1998 March 31, 1997
--------------- --------------
<S> <C> <C>
Revenues:
Servicing fees $3,694 $2,726
Gain on sale of mortgage loans, net 5,233 2,407
Interest income 1,156 933
Placement fee income 2,061 1,125
Other income 1,144 249
----- -----
Total Revenues 13,288 7,440
------ -----
Expenses:
Salaries and employee benefits 6,271 3,557
General and administrative 3,073 1,272
Occupancy 838 528
Provision for loan servicing losses 254 174
Warehouse interest expense 367 127
Non-operating interest expense 211 126
Amortization of servicing rights 1,074 1,082
Depreciation and amortization 621 333
------ -----
Total Expenses 12,709 7,199
------ -----
Income before income tax expense 579 241
Income tax expense 298 174
--- ---
Net income $281 $67
==== ===
EBITDA $2,485 $1,782
====== ======
</TABLE>
THREE MONTHS ENDED MARCH 31, 1998 COMPARED TO THE THREE MONTHS ENDED MARCH 31,
1997
Net income increased by $214 thousand or 319% from $67 thousand for
the three months ended March 31, 1997 to $281 thousand for the three months
ended March 31, 1998. The growth in net income reflects increased gain on
loan sales as the result of the Company funding loans totaling $594 million
during the first quarter of 1998, compared to $264 million during the same
period in 1997. Higher service fees and placement fee income also contributed
to the net income increase, as the Company's servicing portfolio balance ended
the quarter at $10.9 billion, up $4.4 billion from the prior year. These
improvements were partially offset by increases in salaries, general and
administrative expenses and amortization of goodwill, principally resulting
from start-up, integration and support cost related to the formation of WMF
Capital Corp. and recent acquisitions.
The Company's earnings before non-operating interest expense, income
taxes, depreciation and amortization ("EBITDA") for the three months ended
March 31, 1998 was $2.5 million compared with $1.8 million for the same period
of 1997, an increase of $0.7 million or 39%. The increase in EBITDA for the
three months ended March 31, 1998 is attributable primarily to an increase
in loan originations and sales as well as increases in servicing fees. These
increases were partially offset by increases in salaries and general and
administrative expenses related to the formation of WMF Capital Corp. and
recent acquisitions.
7
<PAGE> 10
EBITDA is widely used in the industry as a measure of a company's
operating performance, but should not be considered as an alternative either
(i) to income from continuing operations (determined in accordance with
generally accepted accounting principles) as a measure of profitability or (ii)
to cash flows from operating activities (determined in accordance with
generally accepted accounting principles). EBITDA does not take into account
the Company's debt service requirements and other commitments and, accordingly,
is not necessarily indicative of amounts that may be available for
discretionary uses.
Servicing fees were $3.7 million for the three months ended March 31,
1998, an increase of $1.0 million or 37% from $2.7 million for the three months
ended March 31, 1997. Revenue related to mortgage servicing is based upon the
unpaid principal balance of loans serviced. The increase in servicing fees for
the three months ended March 31, 1998 is a result of the principal balance of
the Company's servicing portfolio increasing to $10.9 billion from $6.5 billion
as of March 31, 1998 and 1997, respectively. The percentage increase in
servicing fee revenue is less than the percentage increase in the servicing
portfolio because the fee as a percentage of unpaid principal balance on the
added servicing, primarily for insurance companies, is lower than the Company's
historical average servicing rate.
Gain on sale of mortgage loans was $5.2 million for the three months
ended March 31, 1998, an increase of $2.8 million or 117% from $2.4 million for
the three months ended March 31, 1997. For the three months ended March 31,
1998 and 1997, the Company sold $594 million and $264 million mortgage loans,
respectively. The increase in gain on sale of mortgage loans is a result of the
increase in loan origination fees and includes the gain on recognizing
originated mortgage servicing rights in the amount of $0.5 million related to
the Company's origination of conduit mortgage loans, and includes an increase
in gain on recognizing originated mortgage servicing rights on FHA insured
loans of $0.7 million.
Interest income was $1.2 million for the three months ended March
31, 1998, an increase of $0.3 million or 33% from $0.9 million for the three
months March 31, 1997. This increase was due to the increase in loan
originations for the three months ended March 31, 1998 compared to the three
months ended March 31, 1997.
Placement fee income was $2.1 million for the three months ended
March 31, 1998, an increase of $1.0 million or 91% from $1.1 million for the
three months ended March 31, 1997. This increase was the result of an increase
in the average investor escrow balances held by the Company.
Other income was $1.1 million for the three months ended March 31,
1998, an increase of $0.9 million or 450% from $0.2 million for the three
months ended March 31, 1997. The increase was the result of increased
prepayment penalties, termination fees, loan management fees and extension
fees.
The Company's total expenses consist of salaries and benefits
(including commissions), other general and administrative expenses, provision
for loan servicing losses, operating interest expense, amortization of mortgage
servicing rights, and other depreciation and amortization.
Salaries and benefits, the largest category of costs for the Company,
increase with loan production due primarily to the payment of commissions on
loan originations. Salaries and benefits increased $2.7 million, or 75%, from
$3.6 million for the three months ended March 31, 1997 to $6.3 million for the
three months ended March 31, 1998. This increase is due primarily to increased
originations, the acquisitions of WMF Askew, WMF Robert C. Wilson and WMF New
York Urban (the "Acquisitions"), and the formation of WMF Capital Corp., which
occurred subsequent to March 31, 1997. These factors, combined with the
Company's expansion into non-multifamily commercial lending, contributed to the
increase in the Company's number of employees from 206 as of March 31, 1997 to
346 as of March 31, 1998.
General and administrative expenses consist of professional fees,
travel, management information, occupancy, telephone and equipment rental, and
other expenses. General and administrative expenses were $3.1 million for the
three months ended March 31, 1998, an increase of $1.8 million or 138% from
$1.3 million for the three months ended March 31, 1997. The increase is a
result of costs associated with Acquisitions and start up costs related to WMF
Capital Corp.
The Company increased the provision for loan servicing losses by $0.1
million for the three months ended March 31, 1998, an increase of 46% from
$0.2 million for the three months ended March 31, 1997 to $0.3 million for the
three months ended March 31, 1998. The increase in addition to reserves is the
result of management's determination, as part of its ongoing assessment of the
8
<PAGE> 11
Company's exposure related to its Fannie Mae DUS portfolio. The Company's
principal balance of Fannie Mae DUS loans in the servicing portfolio was $1,006
million and $795 million as of March 31, 1998 and 1997, respectively.
Warehouse interest expense of $0.4 million for the three months ended
March 31, 1998 increased $0.3 million or 189% from $0.1 million for the three
months ended March 31, 1997. This increase was due to the Company's increased
production.
Non-operating interest expense of $0.2 million for the three months
ended March 31, 1998 increased $0.1 million or 67% from $0.1 million for the
three months ended March 31, 1997. This increase was due to increased
borrowings related to recent Acquisitions.
Depreciation and amortization of $1.7 million for the three months
ended March 31, 1998 increased $0.3 million or 20% from $1.4 million for the
three months ended March 31, 1997. This increase was due primarily to the
amortization related to the goodwill recognized as a result of the
Acquisitions.
The Company's effective tax rate is approximately 51%. The primary
difference between the effective income tax rate and the Federal and State
income tax rates is due to the amortization of goodwill, a portion of which is
not deductible for income tax purposes.
LIQUIDITY AND CAPITAL RESOURCES
The Company's principal financing needs are the financing of loan
origination activities, the pursuit of new acquisitions and the purchase of
servicing rights. To meet these needs, the Company currently utilizes
warehouse lines of credit, a revolving line of credit and medium term loans.
The Company's debt agreements require the maintenance of certain
financial ratios relating to liquidity, leverage, working capital, and net
worth among other restrictions, all of which were met at March 31, 1998.
These provisions have not had, and are not expected to have, an adverse impact
on the ability of the Company to meet these requirements.
In connection with its Fannie Mae Delegated Underwriting and Servicing
(DUS) program, the Company is required to establish a letter of credit to meet
the requirements.
In the course of the Company's mortgage banking operations, the
Company sells to investors the mortgage loans it originates but generally
retains the right to service the loans, thereby increasing the Company's
investment in loan servicing rights. The Company views the sale of loans on a
servicing-retained basis in part as an investing activity. Significant
unanticipated prepayments in the Company's servicing portfolio could have a
material adverse effect on the Company's future operating results and
liquidity.
Cashflows
Operating Activities: In the three months ended March 31, 1998, the
Company's operating activities used cash of approximately $7,712 primarily to
increase its mortgage loans originated. These are generally financed with
short-term borrowings as discussed under "Financing Activities".
Investing Activities: The primary investing activity for which cash
was used during the three months ended March 31, 1998 was the acquisition of
WMF Carbon Mesa and the formation of WMF Capital Corp.
Financing Activities: Net cash provided by financing activities
amounted to $26.2 million for the three months ended March 31, 1998. The
primary reason for this was the increase in borrowings used to capitalize WMF
Capital Corp. as well as to finance the increase in mortgage loans held for
sale as discussed under "Operating Activities".
The Company believes its current cash flow from operations and
borrowings available under its debt facilities will be sufficient to meet its
operating needs. Additionally, in the event additional capital resources are
required the Company believes it will have access to capital through other
sources.
9
<PAGE> 12
YEAR 2000 COMPLIANCE
In November 1997, the Company developed a plan to deal with the Year
2000 problem and has begun converting its computer systems to a Year 2000
compliant system. The plan provides for the conversion efforts to be completed
before December 31, 1999. The Year 2000 problem is the result of computer
programs being written using two digits rather than four to define the
applicable year. The Company currently uses vendor supported software which is
being adjusted to be Year 2000 compliant at no cost to the Company. Other
costs of becoming compliant will be funded through operating cash flows. The
Company will expense the costs associated with these system changes as the
costs are incurred. Such costs are not currently expected to be material.
<PAGE> 13
PART II.
OTHER INFORMATION
Item 1: Legal Proceedings
The Company is involved in litigation related to the normal course of
its business. Management is of the opinion that the litigation will not have a
material adverse impact on the Company's financial position or operating
results. No amounts have been accrued because the loss, if any, cannot be
reasonably estimated.
Item 2: Changes in Securities.
None
Item 3: Defaults upon Senior Securities.
None
Item 4: Submission of Matter to a Vote of Security Holders.
None
Item 5: Other Information.
None
Item 6: Exhibits and Reports on Form 8-K.
None
(a) Exhibits
<TABLE>
<S> <C>
3.1 Restated Certificate of Incorporation of The WMF Group, Ltd.
(the "Company") (1)
3.2 Amendment to the Company's Restated Certificate of Incorporation (2)
3.3 Amended and restated by-laws of The WMF Group, Ltd. *
10.1 Mortgage Selling and Servicing Contract between Fannie Mae and the
Company, dated December 21, 1990. (1)
10.2 Delegated Underwriting and Servicing Addendum to Mortgage
Selling and Servicing Contract between Fannie Mae and the
Company, dated as of March 1, 1994. (1)
10.3 Delegated Underwriting and Servicing Master Loss Sharing
Agreement between Fannie Mae and the Company, dated as
of March 1, 1994. (1)
10.4 Delegated Underwriting and Servicing Reserve Agreement
among Fannie Mae, State Street Bank and Trust Company
and the Company, dated as of June 4, 1996. (1)
10.5 Term Loan Promissory Note between the Company, WMF/Huntoon, Page Associates
</TABLE>
11
<PAGE> 14
<TABLE>
<S> <C>
Limited and Residential Funding Corporation, dated June 14, 1996. (1)
10.6 Servicing Facility Promissory Note between the Company, WMF/Huntoon,
Page Associates Limited and Residential Funding Corporation, dated
June 14, 1996. (1)
10.7 Letter Agreement dated October 25, 1996 between Washington Mortgage Financing
Group and Michael D. Ketcham. (1)
10.8 Key Employee Incentive Plan. (2)
10.9 Key Employee Incentive Award Agreement. (2)
10.10 Key Employee Deferral Compensation Plan. (2)
10.11 Employee Stock Purchase Plan. (2)
10.12 Stock Purchase Agreement dated as of October 31, 1997 between Washington
Mortgage Financial Group, Ltd. and The Robert C. Wilson Company (3)
10.13 Asset Purchase Agreement dated as of Dated December 16, 1997 between
Washington Mortgage Financial Group, Ltd. and NY Urban West Inc (4)
11 Statement re computation of per share earnings *
21 Subsidiaries of the registrant (4)
27 Financial data schedule *
(b) Report on Form 8-K.
</TABLE>
None
- -----------------
(1) Incorporated by reference to the registration statement on Form 10
previously filed by the Company on August 4, 1997.
(2) Incorporated by reference to the registration statement on Form S-1
filed by the Company on October 30, 1997.
(3) Incorporated by reference to the Form 8-K previously filed by the
Company on November 20, 1997.
(4) Incorporated by reference to the Company's Form 10-K for the year
ended December 31, 1997 filed on March 31, 1998.
* Filed herewith
12
<PAGE> 15
SIGNATURES
Pursuant to the requirements of the Securities Act of 1934, the registrant has
duly caused to be signed on its behalf by the undersigned, thereunto duly
authorized.
THE WMF GROUP, LTD.
Date: May 15, 1998 By: /s/ Shekar Narasimhan
---------------------
Shekar Narasimhan
Director, President and Chief
Executive Officer
Date: May 15, 1998 By: /s/ Michael D. Ketcham
------------------
Michael D. Ketcham Executive
Vice President, Chief
Financial Officer and
Treasurer (Principal
Financial Officer)
13
<PAGE> 1
EXHIBIT 3.3
------------------------------------------------------------------------
THE WMF GROUP, LTD.
INCORPORATED UNDER THE LAWS
OF THE STATE OF DELAWARE
-----------------
BY-LAWS
-----------------
AS ADOPTED ON MAY 14, 1997
AND
AMENDED ON APRIL 23, 1998
------------------------------------------------------------------------
<PAGE> 2
BY-LAWS
OF
THE WMF GROUP, LTD.
(A DELAWARE CORPORATION)
ARTICLE I
STOCKHOLDERS
SECTION 1 - CERTIFICATES REPRESENTING STOCK.
(a) Form
Every holder of stock in the corporation shall be entitled to have a
certificate signed by, or in the name of, the corporation by the
Chairman or Vice Chairman of the Board of Directors, if any, or by the
President or a Vice President and by the Treasurer or an Assistant
Treasurer or the Secretary or an Assistant Secretary of the
corporation certifying the number of shares owned by him in the
corporation. Any and all signatures on any such certificate may be
facsimiles. In case any officer, transfer agent, or registrar who has
signed or whose facsimile signature has been placed upon a certificate
shall have ceased to be such officer, transfer agent, or registrar
before such certificate is issued, it may be issued by the corporation
with the same effect as if he were such officer, transfer agent, or
registrar at the date of issue.
(b) Type
Whenever the corporation shall be authorized to issue more than one
class of stock or more than one series of any class of stock, and
whenever the corporation shall issue any shares of its stock as partly
paid stock, the certificates representing shares of any such class or
series or of any such partly), paid stock shall set forth thereon the
statements prescribed by the General Corporation Law of the State of
Delaware. Any restrictions on the transfer or registration of transfer
of any shares of stock of any class or series shall be noted
conspicuously on the certificate representing such shares.
(c) Replacement
The corporation may issue a new certificate of stock in place of any
certificate theretofore issued by it, alleged to have been lost,
stolen, or destroyed, and the Board of Directors may require the owner
of any lost stolen, or destroyed certificate, or his legal
representative, to give the corporation a bond sufficient to indemnify
the corporation against any claim that may be made against it on
account of the alleged loss, theft, or destruction of any such
certificate or the issuance of any such, new certificate.
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SECTION 2 - FRACTIONAL SHARE INTERESTS
The corporation may, but shall not be required to, issue fractions of a share.
If the corporation does not issue fractions of a share, it shall (1) arrange
for the disposition of fractional interests by those entitled thereto, (2) pay
in cash the fair value of fractions of a share as of the time when those
entitled to receive such fractions are determined, or (3) issue scrip or
warrants in registered or bearer form that shall entitle the holder to receive
a certificate for a full share upon the surrender of such scrip or warrants
aggregating a full share. A certificate for a fractional share shall, but scrip
or warrants shall not unless otherwise provided therein, entitle the holder to
exercise voting rights, to receive dividends thereon, and to participate in any
of the assets of the corporation in the event of liquidation. The Board of
Directors may cause scrip or warrants to be issued subject to the conditions
that they shall become void if not exchanged for certificates representing full
shares before a specified date, or subject to the conditions that the shares
for which scrip or warrants are exchangeable may be sold by the corporation and
the proceeds thereof distributed to the holders of scrip or warrants, or
subject to any other conditions that the Board of Directors may impose.
SECTION 3 - STOCK TRANSFERS
Upon compliance with provisions restricting the transfer or registration of
transfer of shares of stock, if any, transfers or registration of transfers of
shares of stock of the corporation shall be made only on the stock ledger of
the corporation by the registered holder thereof, or by his attorney thereunto
authorized by power of attorney duly executed and filed with the Secretary of
the corporation or with a transfer agent or a registrar, if any, and on
surrender of the certificate or certificates for such shares of stock properly
endorsed and the payment of all taxes due thereon.
SECTION 4 - RECORD DATE FOR STOCKHOLDERS
For the purpose of determining the stockholders entitled to notice of or to
vote at any meeting of stockholders or any adjournment thereof, or to express
consent to corporate action in writing without a meeting, or entitled to
receive payment of any dividend or other distribution or the allotment of any
rights, or entitled to exercise any rights in respect of any change,
conversion, or exchange of stock or for the purpose of any other lawful action,
the directors may fix, in advance, a record date, that shall not be more than
60 days nor less than 10 days before the date of such meeting, nor more than 60
days prior to any other action. If no record date is fixed, the record date for
determining stockholders entitled to notice of or to vote at a meeting of
stockholders shall be at the close of business on the day next preceding the
day on which notice is given, or, if notice is waived, at the close of business
on the day next preceding the day on which the meeting is held; the record date
for determining stockholders entitled to express consent to corporate action
in writing without a meeting, when no prior action by the Board of Directors is
necessary, shall be the day on which the first written consent is expressed;
and the record date for determining stockholders for any other purpose shall be
at the close of business on the day on which the Board of Directors adopts the
resolution relating thereto. A determination of stockholders of record entitled
to notice of or to vote at any meeting of stockholders shall apply to any
adjournment of the meeting; provided, however, that the Board of Directors may
fix a new record date for the adjourned meeting.
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SECTION 5 - MEANING OF CERTAIN TERMS
As used herein in respect of the right to notice of a meeting of stockholders
or a waiver thereof or to participate or vote thereat or to consent or dissent
in writing in lieu of a meeting, as the case may be, the term "share" or
"shares," or "share of stock" or "shares of stock," or "stockholder" or
"stockholders" refers to an outstanding share or shares of stock and to a
holder or holders of record of outstanding shares of stock when the corporation
is authorized to issue only one class of shares of stock, and said reference is
also intended to include any outstanding share or shares of stock and any
holder or holders of record of outstanding shares of stock of any class upon
which or upon whom the certificate of incorporation confers such rights where
there are two or more classes or series of shares of stock or upon which or
upon whom the General Corporation Law confers such rights notwithstanding that
the certificate of incorporation may provide for more than one class or series
of shares of stock, one or more of which are limited or denied such rights
thereunder; provided, however, that no such right shall vest in the event of an
increase or a decrease in the authorized number of shares of stock of any class
or series that is otherwise denied voting rights under the provisions of the
certificate of incorporation, except as any provision of law may otherwise
require.
SECTION 6 - STOCKHOLDER MEETINGS
(a) Time
The annual meeting shall be held on the date and at the time fixed by
the directors provided that an annual meeting shall be held on a date
within 13 months after the date of the preceding annual meeting. A
special meeting shall be held on the date and at the time fixed by the
directors.
(b) Place
Annual meetings and special meetings shall be held at such place
within or out of the State of Delaware, as the directors may, from
time to time fix. Whenever the directors shall fail to fix such place,
the meeting shall be held at the principal place of business and
headquarters of the corporation.
(c) Call
Annual meetings and special meetings may be called by the directors or
by any officer instructed by the directors to call the meeting
(d) Notice or Waiver of Notice
Written notice of all meetings shall be given, stating the place,
date, and hour of the meeting and stating the place within the city or
other municipality or community at which the list of stockholders of
the corporation may be examined. The notice of an annual meeting
shall state that the meeting is called for the election of directors
and for the transaction of other
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business that may properly come before the meeting, and shall, (if any
other action that could be taken at a special meeting is to be taken
at such annual meeting) state the purpose or purposes. The notice of a
special meeting shall in all instances state the purpose or purposes
for which the meeting is called. The notice of any meeting shall also
include, or be accompanied by, any additional statements, information,
or documents prescribed by the General Corporation Law of the State of
Delaware. Except as otherwise provided by the General Corporation
Law, a copy of the notice of any meeting shall be given, personally or
by mail, not less than 10 days nor more than 60 days before the date
of the meeting, unless the lapse of the prescribed period of time
shall have been waived, and directed to each stockholder at his record
address or at such other address that he may have furnished by request
in writing to the Secretary of the corporation. Notice by mail shall
be deemed to be given when deposited, with postage thereon prepaid, in
the United States Mail. If a meeting is adjourned to another time, not
more than 30 days hence, and/or to another place, and if an
announcement of the adjourned time and/or place is made at the
meeting, it shall not be necessary to give notice of the adjourned
meeting unless the directors, after adjournment, fix a new record date
for the adjourned meeting. Notice need not be given to any stockholder
who submits a written waiver of notice signed by him before or after
the time stated therein. Attendance of a stockholder at a meeting of
stockholders shall constitute a waiver of notice of such meeting,
except when the stockholder attends the meeting for the express
purpose of objecting, at the beginning of the meeting, to the
transaction of any business because the meeting is not lawfully called
or convened. Neither the business to be transacted at, nor the purpose
of, any regular or special meeting of the stockholders need be
specified in any written waiver of notice.
(e) Stockholder List
The officer who has charge of the stock ledger of the corporation
shall prepare and make, at least 10 days before every meeting of
stockholders, a complete list of the stockholders, arranged in
alphabetical order, and showing the address of each stockholder and
the number of shares registered in the name of each stockholder. Such
list shall be open to the examination of any stockholder, for any
purpose germane to the meeting, during ordinary business hours, for a
period of at least 10 days prior to the meeting, either at a place
within the city or other municipality or community, where the meeting
is to be held, which place shall be specified in the notice of the
meeting or if not so specified, at the place where the meeting is to
be held. The list shall also be produced and kept at the time and
place of the meeting during the whole time thereof, and may be
inspected by any stockholder who is present. The stock ledger shall be
the only evidence as to who are the stockholders entitled to examine
the stock ledger, the list required by this section or the books of
the-corporation, or to vote at any meeting of stockholders.
(f) Conduct of Meeting
Meetings of the stockholders shall be presided over by one of the
following officers in the order of seniority and if present and
acting--the Chairman of the Board, if any, the Vice Chairman of the
Board, if any, the President, a Vice President, or if none of the
foregoing is
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in office and present and acting, by a chairman to be chosen by the
stockholders. The Secretary of the corporation, or in his absence, an
Assistant Secretary, shall act as secretary of every meeting, but if
neither the Secretary nor an Assistant Secretary is present the
Chairman of the meeting shall appoint a secretary of the meeting.
(g) Proxy Representation
Every stockholder may authorize another person or persons to act for
him by proxy in all matters in which a stockholder is entitled to
participate, whether by waiving notice of any meeting, voting or
participating at a meeting, or expressing consent or dissent without a
meeting. Every proxy must be signed by the stockholder or by his
attorney-in-fact. No proxy shall be voted or acted upon after three
years from its date unless such proxy provides for a longer period. A
duly executed proxy shall be irrevocable if it states that it is
irrevocable and, if and only as long as, it is coupled with an
interest sufficient in law to support an irrevocable power. A proxy
may be made irrevocable regardless of whether the interest with which
it is coupled is an interest in the stock itself or an interest in the
corporation generally.
(h) Inspectors
The directors, in advance of any meeting, may, but need not, appoint
one or more inspectors of election to act at the meeting or any
adjournment thereof. If an inspector or inspectors are not appointed,
the person presiding at the meeting may, but need not, appoint one or
more inspectors. In case any person who may be appointed as an
inspector fails to appear or act, the vacancy may be filled by
appointment made by the directors in advance of the meeting or at the
meeting by the person presiding thereat. Each inspector, if any,
before entering upon the discharge of his duties, shall take and sign
an oath to faithfully execute the duties of inspector at such meeting
with strict impartiality and according to the best of his ability. The
inspectors, if any, shall determine the number of shares of stock
outstanding and the voting power of each, the shares of stock
represented at the meeting, the existence of a quorum, the validity
and effect of proxies, and shall receive votes, ballots or consents,
hear and determine all challenges and questions arising in connection
with the right to vote, count and tabulate all votes, ballots or
consents, determine the result, and do such acts as are proper to
conduct the election or vote with fairness to all stockholders. On
request of the person presiding at the meeting, the inspector or
inspectors, if any, shall make a report in writing of any challenge,
question or matter determined by him or them and execute a certificate
of any fact found by him or them.
(i) Quorum
The holders of thirty-four percent (34%) of the outstanding shares of
stock shall constitute a quorum at a meeting of stockholders for the
transaction of any business. The stockholders present may adjourn the
meeting in the absence of a quorum.
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(j) Voting
Each share of common stock shall entitle the holder thereof to one
vote. Each holder of preferred stock shall be entitled to the voting
rights fixed by the Board of Directors but in no event more than one
vote for each share of Preferred Stock held. In the election of
directors, a plurality of the votes cast shall elect. Any other action
shall be authorized by a majority of the votes cast except where the
General Corporation Law prescribes a different percentage of votes
and/or a different exercise of voting power, and except as may be
otherwise prescribed by the provisions of the certificate of
incorporation and the By-Laws. In the election of directors, and for
any other action, voting need not be by ballot.
SECTION 7 - STOCKHOLDER ACTION WITHOUT MEETINGS
Any action required by the General Corporation Law to be taken at any annual or
special meeting of stockholders, or any action that may be taken at any annual
or special meeting of stockholders, may be taken without a meeting, without
prior notice and without a vote, if a consent in writing, setting forth the
action so taken, shall be signed by the holders of outstanding stock having not
less than the minimum number of votes that would be necessary to authorize or
take such action at a meeting at which all shares entitled to vote thereon were
present and voted, and shall be delivered to the corporation at its the
principal place of business of the corporation to the attention of the
President and the Secretary of the Corporation. Prompt notice of the taking of
the corporate action without a meeting by less than unanimous written consent
shall be given to those stockholders who have not consented in writing.
ARTICLE II
DIRECTORS
SECTION 1 - POWERS
The business and affairs of the corporation shall be managed by or under the
direction of the Board of Directors of the corporation. The Board of Directors
shall have the authority to fix the compensation of the members thereof. The
use of the phrase "whole board" herein refers to the total number of directors
that the corporation would have if there were no vacancies.
SECTION 2 - QUALIFICATIONS AND NUMBER.
A director need not be a stockholder, a citizen of the United States, or a
resident of the State of Delaware. The initial Board of Directors shall consist
of seven (7) persons. Thereafter the number of directors constituting the whole
board shall be at least one. Subject to the foregoing limitation and except
for the first Board of Directors, such number may be fixed from time to time by
action of the stockholders or of the directors, or if the number is not fixed,
the number shall be seven (7). The number of directors may be increased or
decreased by action of the stockholders or directors.
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SECTION 3 - ELECTION AND TERM
The first Board of Directors, unless the members thereof shall have been named
in the Certificate of Incorporation, shall be elected by the incorporator or
incorporators and shall hold of office until the first annual meeting of
stockholders and until their successors are elected and qualified or until
their earlier resignation or removal. Any director may resign at any time upon
written notice to the corporation. Thereafter, directors who are elected at an
annual meeting of stockholders, and directors who are elected in the interim to
fill vacancies and newly created directorships, shall hold office until the
next annual meeting of stockholders and until their successors are elected and
qualified or until their earlier resignation or removal. In the interim
between annual meetings of stockholders or of special meetings of stockholders
called for the election of directors and/or for the removal of one or more
directors and for the filling of any vacancy in that connection, newly created
directorships and any vacancies in the Board of Directors, including unfilled
vacancies resulting from the removal of directors with or without cause, may be
filled by the vote of a majority of the remaining directors then in office,
although less than a quorum, or by the sole remaining director.
SECTION 4 - MEETINGS
(a) Time
Meetings shall be held at such time as the Board shall fix, except
that the first meeting of a newly elected Board shall be held as soon
after its election as the directors may conveniently assemble.
(b) Place
Meetings shall be held at such place within or out of the State of
Delaware as shall be fixed by the Board.
(c) Call
No call shall be required for regular meetings for which the time and
place have been fixed. Special meetings may be called by or at the
direction of the Chairman of the Board, if any, the Vice Chairman of
the Board, if any, of the President, or of a majority of the directors
in office.
(d) Notice of Actual or Constructive Waiver
No notice shall be required for regular meetings for which the time and place
have been fixed. Written, oral, or any other mode of notice of the time and
place shall be given for special meetings in sufficient time for the convenient
assembly of the directors thereat. Notice need not be given to any director or
to any member of a committee of directors who submits a written waiver of
notice signed by him before or after the time stated therein. Attendance of any
such person at a meeting shall constitute a waiver of notice of such meeting,
except when he attends a meeting for the express purpose of objecting, at the
beginning of the meeting, to the transaction of any business
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because the meeting is not lawfully called or convened. Neither the business to
be transacted at, nor the purpose of, any regular or special meeting of the
directors need be specified in any written waiver of notice.
(e) Quorum and Action
A majority of the whole Board shall constitute a quorum except when a vacancy
or vacancies prevents such majority, whereupon a majority of the directors in
office shall constitute a quorum provided that such majority shall constitute
at least one-third of the whole Board. A majority of the directors present,
whether or not a quorum is present, may adjourn a meeting to another time and
place. Except as herein otherwise provided, and except as otherwise provided by
the General Corporation Law, the vote of the majority of the directors present
at a meeting which a quorum is present shall be the act of the Board of
Directors. The quorum and voting provisions herein stated shall not be
construed as conflicting with any provisions of the General Corporation Law and
these By-Laws that govern a meeting of directors held to fill vacancies and
newly created directorships in the Board or action of disinterested directors.
(f) Telecommunications
Any member or members of the Board of Directors or of any committee designated
by the Board, may participate in a meeting of the Board, or any such committee,
as the case may be, by means of conference telephone or similar communications
equipment by means of which all persons participating in the meeting can hear
each other.
(g) Chairman of the Meeting
The Chairman of the Board, if any and if present and acting, shall preside at
all meetings. Otherwise, the Vice Chairman of the Board, if any and if present
and acting, or the President, if present and acting, or any other director
chosen by the Board, shall preside.
SECTION 5 - REMOVAL OF DIRECTORS
Except as may otherwise be provided by the General Corporation Law of the State
of Delaware, any director or the entire Board of Directors may be removed, with
or without cause, by the holders of a majority of the shares then entitled to
vote at an election of directors.
SECTION 6 - COMMITTEES.
The Board of Directors may, by resolution passed by a majority of the whole
Board, designate one or more committees, including but not limited to an Audit
Committee and a Compensation Committee. Each committee to consist of one or
more of the directors of the corporation. The Board may designate one or more
directors as alternate members of any committee, who may replace any absent or
disqualified member at any meeting of the committee. In the absence or
disqualification of any member of any such committee or committees, the member
or members thereof present at any meeting and not disqualified from voting,
whether or not he or they constitute
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a quorum, may unanimously appoint another member of the Board of Directors to
act at the meeting in the place of any such absent or disqualified member. Any
such committee, to the extent provided in the resolution of the Board, shall
have and may exercise the powers and authority of the Board of Directors in the
management of the business and affairs of the corporation with the exception of
any authority the delegation of which is prohibited by Section 141 of the
General Corporation Law, and may authorize the seal of the corporation to be
affixed to all papers that may require it.
SECTION 7 - WRITTEN ACTION
Any action required or permitted to be taken at any meeting of the Board of
Directors or any committee thereof may be taken without a meeting if all
members of the Board or committee, as the case may be, consent thereto in
writing, and the writing or writings are filed with the minutes of proceedings
of the Board or committee.
ARTICLE III
OFFICERS
SECTION 1 - EXECUTIVE OFFICERS
The officers of the corporation shall consist of a President, a Secretary, a
Treasurer, and, if deemed necessary, expedient, or desirable by the Board of
Directors, a Chairman of the Board, a Vice Chairman of the Board, one or more
Executive Vice Presidents, one or more other Vice Presidents, one or more
Assistant Secretaries, one or more Assistant Treasurers, and such other
Officers with such titles as the resolution of the Board of Directors choosing
them shall designate. Except as may otherwise be provided in the resolution of
the Board of Directors choosing him, no officer other than the Chairman or Vice
Chairman of the Board, if any, need be a director. Any number of offices may be
held by the same person, as the directors may determine.
SECTION 2 - TERM
Unless otherwise provided for in the resolution choosing him, each Officer
shall be chosen for a term that shall continue until the meeting of the Board
of Directors following the next annual meeting of stockholders and until his
successor shall have been chosen and qualified, or until his earlier death or
resignation or removal in the manner hereinafter provided. The Board of
Directors may require any officer to give security for the faithful performance
of his duties. Any officer may resign at any time by giving written notice to
the Board of Directors, the Chairman, the President or the Secretary. Such
resignation shall take effect at the time specified therein or if the time be
not specified, at the time it is accepted by action of the Board of Directors.
Except as aforesaid, the acceptance of such resignation shall not be necessary
to make it effective. All officers and agents elected or appointed by the
Board of Directors shall be subject to removal at any time by the Board of
Directors or by the stockholders of the corporation with or without cause.
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SECTION 3 - AUTHORITY AND DUTIES
All officers of the corporation shall have such authority and perform such
duties in the management and operation of the corporation as shall be
prescribed in the resolutions of the Board of Directors designating and
choosing such officers and prescribing their authority and duties, and shall
have such additional authority and duties as are incident to their office
except to the extent that such resolutions may be inconsistent therewith. The
Secretary or an Assistant Secretary of the corporation shall record all of the
proceedings of all meetings and actions in writing of stockholders, directors,
and committees of directors, and shall exercise such additional authority and
perform such additional duties as the Board shall assign to them. Any vacancy
in any office may be filled by the Board of Directors.
SECTION 4 - THE PRESIDENT
The President shall be the chief executive officer of the Corporation. The
President shall have general and active management and control of the business
and affairs of the Corporation subject to the control of the Board, and shall
see that all orders and resolution of the Board are carried into effect.
SECTION 5 - THE SECRETARY
The Secretary shall, to the extent practicable, attend all meetings of the
Board of Directors and all meetings of the stockholders and shall record all
votes and the minutes of all proceedings in a book to be kept for that purpose.
The Secretary may give, or cause to be given, notice of all meetings of the
stockholders and of the Board, and shall perform such other duties as may be
prescribed by the Board of Directors, or the President, under whose supervision
the Secretary shall act. The Secretary shall keep in safe custody the seal of
the corporation and affix the same to any duly authorized instrument requiring
it and, when so affixed, it shall be attested by signature of the Secretary or
by the signature of the Treasurer or, if appointed, an Assistant Secretary or
an Assistant Treasurer. The Secretary shall keep in safe custody the
certificate books and stockholder records and such other books and records as
the Board of Directors may direct, and shall perform all other duties as from
time to time may be assigned by the Board of Directors or the President.
SECTION 6 - THE TREASURER
The Treasurer shall have the care and custody of the corporate funds and other
valuable effects, including securities, and shall keep full and accurate
accounts of receipts and disbursements in books belonging to the corporation,
and shall deposit all moneys and other valuable effects into the name and to
the credit of the corporation in such depositories as may be designated by the
Board of Directors. The Treasurer shall disburse the funds of the corporation
as may be ordered by the Board of Directors, taking proper vouchers for such
disbursements, and shall render to the President and directors, at their
regular meetings of the Board of Directors, or whenever they may require it, an
account of all transactions and of the financial condition of the corporation,
and shall perform all other duties incident to the office of Treasurer and such
other duties as from time to time may be assigned to him by the Board of
Directors, or the President.
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ARTICLE IV
CORPORATE SEAL
The corporate seal shall be in such form as the Board of Directors shall
prescribe.
ARTICLE V
FISCAL YEAR
The fiscal year of the corporation shall be fixed, and shall be subject to
change, by the Board of Directors.
ARTICLE VI
EXONERATION, INDEMNIFICATION, AND INSURANCE
SECTION 1 - EXONERATION AND INDEMNIFICATION
(a) Exoneration
As provided in the certificate of incorporation, and to the fullest
extent permitted by the General Corporation Laws as the same exists or
may hereafter be amended, a director of this corporation shall not be
personally liable to the corporation or its stockholders for breach of
fiduciary duty as a director.
(b) Indemnification
Without limitation of any right conferred by paragraph (a) of this
Section 1, any person made, or threatened to be made, a party to any
threatened, pending or completed action, suit or proceedings, whether
civil, criminal, administrative or investigative, by reason of the
fact that he, his testator or intestate is or was a director, officer,
employee or agent of the corporation, or is or was acting at the
request of the corporation as a director, officer, employee or agent
of another corporation, partnership, joint venture, trust or other
enterprise, including, without limitation, as a fiduciary of, or
otherwise rendering services to, any employee benefit plan of or
relating to the corporation, shall be indemnified by the corporation
against expenses (including attorneys' fees), judgments, fines, excise
taxes and amount paid in settlement actually and reasonably incurred
by him in connection with such action, suit or proceeding, or in
connection with such action, suit or proceeding, in connection with
any appeal therein, or in enforcing this provision; provided, that
such person acted in good faith and in a manner he reasonably believed
to be in, or not opposed to, the best interests of the corporation,
and with respect to a criminal action or proceeding, had no reasonable
cause to believe his conduct was unlawful; except that no
indemnification shall be made in the case of an action, suit or
proceeding by or in the right of the corporation in relation to
matters as to which it shall be adjudged in such action, suit or
proceeding that such director, officer, employee or agent is liable to
the corporation,
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unless a court having jurisdiction shall determine that, despite such
adjudication, such person is fairly and reasonably entitled to
indemnification.
(c) No Exclusivity
The foregoing rights of exoneration and indemnification shall not be
deemed exclusive of any other rights to which any director, officer,
employee or agent may be entitled, or of any power of the corporation
apart from the provisions of this Section 1.
SECTION 2 - INSURANCE
The Corporation may purchase and maintain insurance on behalf of any person who
is or was a director, officer, employee or agent of the corporation, or any
person who is or was serving at the request of the corporation as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, to the full extent and in the manner permitted by
the applicable laws of the United States and the State of Delaware from time to
time in effect, whether or not the corporation would have the power to
indemnify such person under Section 1 of this Article VI.
ARTICLE VII
AMENDMENT OF BY-LAWS
Subject to the provisions of the certificate of incorporation and the
provisions of the General Corporation Law, the power to amend, alter, or repeal
these By-Laws and to adopt new By-Laws may be exercised by the Board of
Directors or by the stockholders.
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THE WMF GROUP, LTD.
(dollars in thousands, except per share data)
EXHIBIT 11
Statement re computation of per share earnings
<TABLE>
<CAPTION>
THREE MONTHS THREE MONTHS
ENDED ENDED
MARCH 31, 1998 MARCH 31, 1997
--------------- ----------------
NET PER SHARE NET PER SHARE
INCOME SHARES AMOUNT INCOME SHARES AMOUNT
------ ------ --------- ------ ------ ---------
<S> <C> <C> <C> <C> <C> <C>
BASIC EPS $ 281 5,076 $ 0.06 $ 67 4,217 $ 0.02
Effect of dilutive securities
Options - 243 (.01) - - -
----- ----- -------- ------ ----- --------
DILUTED EPS $ 281 5,319 $ 0.05 $ 67 4,217 $ 0.02
----- ----- -------- ------ ----- --------
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-31-1998
<CASH> 24,062
<SECURITIES> 3,836
<RECEIVABLES> 2,367
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 83,606
<PP&E> 4,231
<DEPRECIATION> 1,025
<TOTAL-ASSETS> 142,719
<CURRENT-LIABILITIES> 64,326
<BONDS> 0
0
0
<COMMON> 52
<OTHER-SE> 41,612
<TOTAL-LIABILITY-AND-EQUITY> 142,719
<SALES> 0
<TOTAL-REVENUES> 13,288
<CGS> 0
<TOTAL-COSTS> 10,182
<OTHER-EXPENSES> 1,695
<LOSS-PROVISION> 254
<INTEREST-EXPENSE> 578
<INCOME-PRETAX> 579
<INCOME-TAX> 298
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 281
<EPS-PRIMARY> 0.06
<EPS-DILUTED> 0.05
</TABLE>
