<PAGE>
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 September 30, 1997
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OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
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Commission file number: 0-23131
People's Preferred Capital Corporation
(Exact name of registrant as specified in its charter)
Maryland 95-4642529
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
5900 Wilshire Boulevard, Los Angeles, California 90036
(Address of principal executive offices)
(213) 938-6300
(Registrant's telephone number, including area code)
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(Former name, former address and former fiscal year, if changed since last
report)
Indicate by check mark whether the registrant (1) has filed all reports to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES [ ] NO [X]
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
Common Stock, $0.01 par value 10,000
Series A Preferred Shares, $0.01 1,426,000
(Class) (Shares outstanding as of
November 10, 1997
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PEOPLE'S PREFERRED CAPITAL CORPORATION
INDEX
Page No.
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheet - September 30, 1997 3
Statement of Earnings - For the period from
Inception through September 30, 1997 3
Statement of Cash Flows - For the period from
Inception through September 30, 1997 3
Notes to Financial Statements 4
Item 2. Management's Discussion and Analysis 5
Item 3. Quantitative and Qualitative Disclosures About
Market Risk 5
PART II OTHER INFORMATION
Item 1: Legal Proceedings 6
Item 2: Changes in Securities 6
Item 3: Defaults upon Senior Securities 6
Item 4: Submission of Matters to a Vote of Security Holders 6
Item 5: Other Information 6
Item 6: Exhibits and Reports on Form 8-K 6
2
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PEOPLE'S PREFERRED CAPITAL CORPORATION
BALANCE SHEET (UNAUDITED)
At September 30, 1997
(Dollars in thousands)
ASSETS:
Cash......................................................... $ --
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Total assets............................................ $ --
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LIABILITIES:
Total liabilities........................................... --
STOCKHOLDERS' EQUITY:
Preferred stock, par value $0.01, 4,000,000 shares
authorized, none issued and outstanding..................... --
Common stock, par value $0.01 per share (1); 10,000
shares authorized and issued and outstanding................ --
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Total stockholders' equity.................................. --
------
Total liabilities and stockholders' equity.................. $ --
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PEOPLE'S PREFERRED CAPITAL CORPORATION
STATEMENT OF EARNINGS (UNAUDITED)
For the period from inception (June 19, 1997) through September 30, 1997
(In thousands)
Net earnings.................................. $ --
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Net earnings per common share................. $ --
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PEOPLE'S PREFERRED CAPITAL CORPORATION
STATEMENT OF CASH FLOWS (UNAUDITED)
For the period from Inception (June 19, 1997) through September 30, 1997
(In thousands)
Net earnings............................................... $ --
Cash provided by financing activity; issuance of
common stock to parent.................................... --
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Cash balance at September 30, 1997......................... $ --
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3
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PEOPLE'S PREFERRED CAPITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1: ORGANIZATION
People's Preferred Capital Corporation (the "Company"), a wholly-owned
subsidiary of People's Bank of California (the "Bank"), was incorporated on
June 19, 1997 in the State of Maryland.
The Company intends to invest in mortgage-related and other qualified
assets financed by common and preferred stock offerings and expects to
generate income for distribution to its future preferred and common
stockholders primarily from the net interest income derived from its
investments in mortgage-related and other qualified assets. The Company
intends to purchase these mortgage-related and other qualified assets
primarily from the Bank at the net book value at the date of the
transactions. The Company intends to operate in a manner that permits it to
elect, and it intends to elect, to be subject to tax as a real estate
investment trust for federal income tax purposes. The Company did not have
any operations as of September 30, 1997.
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The unaudited financial statements of the Company are prepared in
accordance with generally accepted accounting principles for interim
financial information. In the opinion of management, all adjustments
(consisting only of normal recurring adjustments) necessary for a fair
presentation of the financial position and the results of operations for the
interim period presented have been included.
NOTE 3: SUBSEQUENT EVENT
On October 3, 1997, People's Preferred Capital Corporation commenced its
operations upon consummation of a public offering of 1,426,000 shares of its
9.75% Noncumulative Exchangeable Preferred Stock, Series A (the "Series A
Preferred Shares"), at a liquidation preference of $25.00 per share.
The Company used the gross proceeds raised of $35.65 million from the
initial public offering of the Series A Preferred Shares and the concurrent
contribution of $38.4 million of additional capital by the Bank to pay
expenses incurred during the offering and the formation of the Company and to
purchase from the Bank the Company's initial portfolio of residential and
commercial mortgage loans ("Mortgage Loans")
4
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PEOPLE'S PREFERRED CAPITAL CORPORATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
The Company was incorporated under the laws of the State of Maryland for
the purpose of investing in mortgage-related assets financed by one or more
preferred stock offerings. The Company expects to generate income for
distribution to its preferred and common stockholders primarily from the net
interest income derived from its investments in mortgage-related assets. The
Company intends to purchase these mortgage-related assets primarily from the
Bank, although the Company may also acquire mortgage-related assets from
unaffiliated third parties. The Company intends to operate in a manner that
permits it to elect, and it intends to elect, to be subject to tax as a real
estate investment trust for federal income tax purposes.
The Company commenced its operations on October 3, 1997, upon
consummation of a public offering of 1,426,000 shares of its 9.75% Series A
Preferred Shares. At September 30, 1997, the Company had no material
liabilities and had not conducted any material operations.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable.
5
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PEOPLE'S PREFERRED CAPITAL CORPORATION
PART II OTHER INFORMATION
ITEM 1: LEGAL PROCEEDINGS
None
ITEM 2: CHANGES IN SECURITIES
None
ITEM 3: DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4: SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5: OTHER INFORMATION
None
ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K
(a) The following exhibit is included herein:
(27) Financial Data Schedule
(b) Reports on Form 8-K:
No reports on From 8-K have been filed during the quarter
ended September 30, 1997
6
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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.
PEOPLE'S PREFERRED CAPITAL
CORPORATION
/s/ Rudolf P. Guenzel
-------------------------------------
Rudolf P. Guenzel
President and Chief Executive Officer
/s/ J. Michael Holmes
-------------------------------------
J. Michael Holmes
Executive Vice President and Chief
Financial Officer
Date: November 12, 1997
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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.
PEOPLE'S PREFERRED CAPITAL
CORPORATION
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Rudolf P. Guenzel
President and Chief Executive Officer
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J. Michael Holmes
Executive Vice President and Chief
Financial Officer
Date: November 12, 1997
<PAGE>
Exhibit Index
Exhibit No. Description
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27 Financial Data Schedule
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