<PAGE>
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended MARCH 31, 1999
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
(323) 938-6300
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 /X/ NO / /
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Class Shares Outstanding At May 6, 1999
----- ---------------------------------
Common Stock, $0.01 par value 10,000
Series A Preferred Shares, $0.01 1,426,000
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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PEOPLE'S PREFERRED CAPITAL CORPORATION
FIRST QUARTER 1999 REPORT ON FORM 10-Q
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page No.
--------
<S> <C>
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
Statements of Financial Condition - March 31, 1999
and December 31, 1998 3
Statements of Earnings - For the three months ended March 31, 1999
and March 31, 1998 4
Statements of Cash Flows - For the three months ended March 31, 1999
and March 31, 1998 5
Notes to Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 7
Item 3. Quantitative and Qualitative Disclosures About
Market Risk 12
PART II OTHER INFORMATION
Item 1: Legal Proceedings 13
Item 2: Changes in Securities 13
Item 3: Defaults upon Senior Securities 13
Item 4: Submission of Matters to a Vote of Security Holders 13
Item 5: Other Information 13
Item 6: Exhibits and Reports on Form 8-K 14
</TABLE>
2
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PEOPLE'S PREFERRED CAPITAL CORPORATION
STATEMENTS OF FINANCIAL CONDITION
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1999 1998
------- -------
<S> <C> <C>
ASSETS:
Cash and cash equivalents $ 2,417 $ 1,301
Mortgage loans, net (Note 2) 69,093 69,457
Due from affiliate 613 1,277
Accrued interest receivable 383 370
Other assets 9 --
------- -------
Total assets $72,515 $72,405
------- -------
------- -------
LIABILITIES:
Accounts payable and accrued liabilities $ 17 $ 42
------- -------
Total liabilities 17 42
------- -------
COMMITMENTS AND CONTINGENCIES -- --
STOCKHOLDERS' EQUITY:
Preferred stock, par value $.01 per share, 4,000,000 shares authorized:
Preferred stock series A, issued and outstanding
1,426,000 shares, liquidation value $35,650 14 14
Common stock, par value $.01 per share, 4,000,000
shares authorized: 10,000 shares issued and
outstanding -- --
Additional paid-in capital 72,075 72,075
Retained earnings 409 274
------- -------
Total stockholders' equity 72,498 72,363
------- -------
Total liabilities and stockholders' equity $72,515 $72,405
------- -------
------- -------
</TABLE>
See accompanying notes to financial statements.
3
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PEOPLE'S PREFERRED CAPITAL CORPORATION
STATEMENTS OF EARNINGS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Three Months Ended March 31,
----------------------------
1999 1998
------- --------
<S> <C> <C>
REVENUES:
Interest on mortgage loans $1,359 $1,443
Interest on deposits 38 37
------ ------
Total revenues: 1,397 1,480
------ ------
EXPENSES:
Servicing fees 43 42
Management fees 50 50
Professional fees 18 50
Other 8 4
------ ------
Total expenses 119 146
------ ------
Net earnings $1,278 $1,334
------ ------
------ ------
</TABLE>
See accompanying notes to financial statements.
4
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PEOPLE'S PREFERRED CAPITAL CORPORATION
STATEMENTS OF CASH FLOWS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Three months ended March 31,
----------------------------
1999 1998
------- -------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings $ 1,278 $ 1,334
Adjustments to reconcile net earnings to net cash provided by
operating activities:
Increase in accrued interest receivable (13) (4)
Decrease in due from affiliates 664 1,054
Decrease in dividends payable -- (460)
Increase in other assets (9) (9)
Decrease in accrued expenses (25) --
------- -------
Net cash provided by operating activities 1,895 1,915
------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Loan purchases (5,946) --
Mortgage loan principal repayments 6,335 4,281
Purchase of accrued interest (25) --
------- -------
Net cash provided by investing activities 364 4,281
------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Preferred stock dividends paid (869) (870)
Common stock dividends paid (274) (48)
------- -------
Net cash used in financing activities (1,143) (918)
------- -------
Net increase in cash and cash equivalents 1,116 5,278
Cash and cash equivalents at beginning of period 1,301 44
------- -------
Cash and cash equivalents at end of period $ 2,417 $ 5,322
------- -------
------- -------
</TABLE>
See accompanying notes to financial statements.
5
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PEOPLE'S PREFERRED CAPITAL CORPORATION
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - ORGANIZATION AND BASIS OF PRESENTATION
People's Preferred Capital Corporation (the "Company") is a Maryland
corporation incorporated on June 19, 1997 which was created for the purpose of
acquiring and holding mortgage loans ("Mortgage Loans") secured by real estate
assets. The Company commenced its operations on October 3, 1997. The Company's
outstanding common stock is wholly owned by People's Bank of California, a
federal savings bank (the "Bank").
The accompanying financial statements were prepared in accordance with
generally accepted accounting principles for interim financial information and
with the instructions for meeting the requirements of Regulation S-X, Article 10
and therefore do not include all disclosures necessary for complete financial
statements. In the opinion of management, all adjustments have been made that
are necessary for a fair presentation of the financial position and results of
operations and cash flows as of and for the period presented. All such
adjustments are of a normal recurring nature. The results of operations for the
three months ended March 31, 1999 are not necessarily indicative of the results
that may be expected for the entire fiscal year or any other interim period.
The financial statements should be read in conjunction with the audited
financial statements and accompanying notes thereto as of December 31, 1998
included in the Company's Annual Report on Form 10-K. All terms used but not
defined elsewhere herein have meanings ascribed to them in the Company's Annual
Report on Form 10-K filed on March 30, 1999.
NOTE 2 - MORTGAGE LOANS, NET
Mortgage loans, net consisted of the following (in thousands):
<TABLE>
<CAPTION>
March 31, 1999 December 31, 1998
-------------- -----------------
<S> <C> <C>
1-4 unit residential mortgage loans $ 58,325 $ 58,126
Multi-family and commercial loans 11,021 11,584
-------------- -----------------
69,346 69,710
Allowance for loan losses (253) (253)
-------------- -----------------
Total residential mortgage loans, net $ 69,093 $ 69,457
-------------- -----------------
-------------- -----------------
</TABLE>
6
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
WHEN USED IN THIS FORM 10-Q OR FUTURE FILINGS BY THE COMPANY WITH THE
SECURITIES AND EXCHANGE COMMISSION ("SEC"), IN THE COMPANY'S PRESS RELEASES OR
OTHER PUBLIC OR STOCKHOLDER COMMUNICATIONS, OR IN ORAL STATEMENTS MADE WITH AN
APPROVAL OF AN AUTHORIZED EXECUTIVE OFFICER, THE WORDS OR PHRASES "WOULD BE",
"WILL ALLOW", "INTENDS TO", "WILL LIKELY RESULT", "ARE EXPECTED TO", "WILL
CONTINUE", "IS ANTICIPATED", "ESTIMATE", "PROJECT", OR SIMILAR EXPRESSIONS ARE
INTENDED TO IDENTIFY "FORWARD LOOKING STATEMENTS" WITHIN THE MEANING OF THE
PRIVATE LITIGATION REFORM ACT OF 1995.
THE COMPANY WISHES TO CAUTION READERS NOT TO PLACE UNDUE RELIANCE ON
ANY SUCH FORWARD-LOOKING STATEMENTS, WHICH SPEAK ONLY AS OF THE DATE MADE, AND
TO ADVISE READERS THAT VARIOUS FACTORS, INCLUDING REGIONAL AND NATIONAL ECONOMIC
CONDITIONS, SUBSTANTIAL CHANGES IN LEVELS OF MARKET INTEREST RATES, CREDIT AND
OTHER RISK OF LENDING AND INVESTMENT ACTIVITIES AND COMPETITIVE AND REGULATORY
FACTORS, COULD AFFECT THE COMPANY'S FINANCIAL PERFORMANCE AND COULD CAUSE THE
COMPANY'S ACTUAL RESULTS FOR FUTURE PERIODS TO DIFFER MATERIALLY FROM THOSE
ANTICIPATED OR PROJECTED. THE COMPANY DOES NOT UNDERTAKE, AND SPECIFICALLY
DISCLAIMS ANY OBLIGATION, TO UPDATE ANY FORWARD-LOOKING STATEMENTS TO REFLECT
OCCURRENCES OR UNANTICIPATED EVENTS OR CIRCUMSTANCES AFTER THE DATE OF SUCH
STATEMENTS.
<TABLE>
<CAPTION>
At or for the Three Months Ended
-------------------------------------
March 31, 1999 March 31, 1998
-------------------------------------
(dollars in thousands)
<S> <C> <C>
STATEMENT OF OPERATIONS:
Interest on mortgage loans $ 1,359 $ 1,443
Total revenues 1,397 1,480
Net earnings 1,278 1,334
STATEMENT OF CONDITION:
Mortgage loans, net $69,093 $66,142
Total assets 72,515 72,553
Total stockholders' equity 72,498 72,553
Average yield on mortgage loans 7.88% 8.41%
</TABLE>
OVERVIEW
The Company's business is to acquire and maintain a real estate loan
portfolio. The income from this portfolio generates net earnings that must be
distributed to the Company's stockholders in order to maintain tax exempt status
as a real estate investment trust. The Company anticipates that it will
periodically reinvest excess cash from loan principal payments into real estate
loans.
7
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RESIDENTIAL MORTGAGE LOANS. The following table sets forth as of March
31, 1999 certain information with respect to each type of Residential Mortgage
Loan included in the Company's portfolio (dollars in thousands):
TYPE OF RESIDENTIAL MORTGAGE LOAN PRODUCT
<TABLE>
<CAPTION>
Average
Remaining Average
Principal Balance Percentage of Average Initial Term Note
Type Portfolio LTV (in months) Rate
- -------------------------------- ------------------- ------------------- ------------------- ----------------- ----------------
<S> <C> <C> <C> <C> <C>
7/23 step rate $ 1,768 3.0% 83.5% 283 7.69%
15 year fixed rate 4,124 7.1 61.3 117 8.03
30 year fixed rate 52,433 89.9 68.5 321 7.54
------------------- ------------------- ------------------- ----------------- ----------------
$58,325 100.0% 68.3% 305 7.58%
------------------- ------------------- ------------------- ----------------- ----------------
------------------- ------------------- ------------------- ----------------- ----------------
</TABLE>
The Residential Mortgage Loans included in the Company's loan portfolio
are either fixed rate loans, or are "7/23 step rate" loans. The "7/23 step rate"
loan has a fixed interest rate for the first seven years, and adjusts once
thereafter to a rate which applies to the remaining 23 years equal to 150 basis
points above the FNMA 30 year commitment rate for delivery as of a date
specified in the related mortgage note.
The following table schedules residential mortgage loans with past due
principal and interest payments at March 31, 1999 (dollars in thousands):
<TABLE>
<CAPTION>
Number Principal Balance Percent of Portfolio
-------------------------- ------------------------- -------------------------
<S> <C> <C> <C>
30 to 59 days past due 1 $197 0.3%
120 days and more past due 1 75 0.1
</TABLE>
The following table schedules residential mortgage loans with past due
principal and interest payments at March 31, 1998 (dollars in thousands):
<TABLE>
<CAPTION>
Number Principal Balance Percent of Portfolio
-------------------------- ------------------------- -------------------------
<S> <C> <C> <C>
30 to 59 days past due 1 $205 0.31%
</TABLE>
8
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COMMERCIAL MORTGAGE LOANS. The following table sets forth as of March
31, 1999 certain information with respect to each type of Commercial Mortgage
Loan included in the Company's portfolio (dollars in thousands):
TYPE OF COMMERCIAL MORTGAGE LOAN PRODUCT
<TABLE>
<CAPTION>
Average
Average Remaining Average
Principal Balance Percentage of Initial Term Note
Type Portfolio LTV (in months) Rate
- ----------------------------------- ------------------- ----------------- ------------------ --------------- ----------------
<S> <C> <C> <C> <C> <C>
Commercial fixed rate
balloon $ 5,213 47.3% 68.5% 94 9.43%
Commercial fixed rate 1,399 12.7 74.4 115 9.98
Multi-family fixed rate
balloon 1,883 17.1 47.5 96 8.97
Multi-family fixed rate 2,526 22.9 73.9 93 9.76
------------------- ----------------- ------------------ --------------- ----------------
$11,021 100.0% 68.4% 97 9.50%
------------------- ----------------- ------------------ --------------- ----------------
------------------- ----------------- ------------------ --------------- ----------------
</TABLE>
Of the Commercial Mortgage Loans included in the Company's portfolio,
approximately 64.5% are not fully amortizing and will have significant principal
balances (or "balloon payments") due upon maturity.
The following table schedules commercial mortgage loans with past due
principal and interest payments at March 31, 1999 (dollars in thousands):
<TABLE>
<CAPTION>
Number Principal Balance Percent of Portfolio
-------------------------- ------------------------- -------------------------
<S> <C> <C> <C>
120 days and more past due 1 $ 31,984 0.3
</TABLE>
There were no commercial mortgage loans with past due principal and
interest payments at March 31, 1998.
All the Commercial Mortgage Loans included in the Company's portfolio
bear interest at fixed rates. The weighted average interest rate of the
portfolio at March 31, 1999 is 9.50%.
ALLOWANCE FOR LOAN LOSSES
The Company maintains an allowance for loan losses to absorb potential
loan losses from the entire loan portfolio. At March 31, 1999, the allowance for
loan losses amounted to $253,000 or 0.36% of total loans. The Company has not
incurred any loan losses since its inception. On an ongoing basis, management
monitors the loan portfolio and evaluates the adequacy of the allowance for loan
losses. Based upon its analysis, management believes that the allowance for loan
losses as of March 31, 1999 is sufficient to absorb any unidentified losses that
currently exist in the portfolio. Management will continue to review the loan
portfolio to determine the extent to which any changes in loss experience may
require additional provisions in the future.
9
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FINANCIAL CONDITION
At March 31, 1999, the Company had total assets of $72.5 million, an
increase of $110,000 from December 31, 1998. Mortgage loans totaled $69.1
million, or 95.3% of the Company's assets at the end of the quarter, compared to
$69.5 million, or 95.9% of total assets, at December 31, 1998. The reduction in
loans represented receipt of loan principal repayments. During the first three
months of 1999, the Company purchased thirteen single family residential loans
with an aggregate principal balance of $5.9 million.
At March 31, 1999, the Company had $17,000 in accounts payable and
accrued liabilities as compared to $42,000 at December 31, 1998. Preferred stock
dividends of $869,000 and common stock dividends of $274,000 were both declared
and paid during the first three months of 1999.
RESULTS OF OPERATIONS
The Company reported total revenues of $1.4 million for the three-month
period ended March 31, 1999 as compared to total revenues of $1.5 million for
the three month period ended March 31, 1998. This decrease was primarily a
result of a $84,000 reduction in interest revenue on mortgage loans. Expenses
totaled $119,000 for the three months ended March 31, 1999, including $43,000 in
servicing fees, $50,000 in management fees paid to the Bank, $18,000 in
professional fees and $8,000 in other expenses. After deduction of total
expenses, net earnings totaled $1.3 million compared to net earnings of $1.3
million for the first quarter ended March 31, 1998. Total expenses amounted to
$119,000 for the first quarter ended March 31, 1999 compared to $146,000 for the
three months ended March 31, 1998. This decrease in expenses was mainly due to a
decrease audit and legal expenses.
LIQUIDITY AND CAPITAL RESOURCES
The objective of liquidity management is to ensure the availability of
sufficient cash flows to meet all of the Company's financial commitments and to
capitalize on opportunities for the Company's business expansion. In managing
liquidity, the Company takes into account various legal limitations placed on a
real estate investment trust ("REIT").
The Company's principal liquidity needs are to maintain its current
portfolio size through the acquisition of additional Mortgage Loans as Mortgage
Loans currently in the portfolio mature or prepay and to pay dividends on the
Series A Preferred Shares. The acquisition of additional Mortgage Loans is
intended to be funded with the proceeds obtained from repayment of principal
balances by individual mortgagees. The Company has not had and does not
anticipate having any material capital expenditures.
To the extent that the Board of Directors determines that additional
funding is required, the Company may raise such funds through additional equity
offerings, debt financing or retention of cash flow (after consideration of
provisions of the Internal Revenue Code of 1986, as amended (the
10
<PAGE>
"Code"), requiring the distribution by a REIT of at least 95% of its "REIT
taxable income" and taking into account taxes that would be imposed on
undistributed income), or a combination of these methods. The organizational
documents of the Company do not contain any limitation on the amount or
percentage of debt, funded or otherwise, that the Company might incur.
Notwithstanding the foregoing, the Company may not, without the approval of a
majority of the Company's independent directors, incur debt in excess of 20% of
the Company's total stockholders' equity. Any such debt incurred may include
intercompany advances made by the Bank to the Company.
The Company also may issue additional series of preferred stock.
However, the Company may not issue additional shares of preferred stock that is,
or will be, senior to the Series A Preferred Shares, without obtaining the prior
consent of holders of at least 66 2/3% of the shares of preferred stock
outstanding at that time. The Company may not issue additional shares of
preferred stock on a parity with the Series A Preferred Shares without the prior
approval of a majority of the Company's independent directors.
INTEREST RATE RISK. The company's interest rate risk is primarily
related to loan prepayments and payoffs. The average maturity of loans is
substantially less than their average contractual terms because of prepayments
and, in the case of conventional mortgage loans, due-on-sale clauses, which
generally give the Company the right to declare a loan immediately due and
payable in the event, among other things, that the borrower sells the real
property subject to the mortgage and the loan is not repaid. The average life of
mortgage loans tends to increase when the current mortgage loan rates are
substantially higher than rates on existing mortgage loans and, conversely,
decrease when rates on existing mortgages are substantially lower than current
mortgage loan rates (due to refinancings of adjustable rate and fixed rate loans
at lower rates). Since December 31, 1998 there were no significant changes in
the anticipated maturities or repricing of the Company's interest earning
assets.
YEAR 2000
During 1997, the Company finalized its plan to address issues related
to the Year 2000 ("Y2K") problem. The Y2K issue is primarily a result of
computer software recognizing a two-digit date field rather than the full four
digits, which identify the appropriate year. Date-sensitive computer programs,
hardware or equipment controlled by microprocessor chips may not appropriately
deal with the year "00".
The Company's loan portfolio is currently serviced by the Bank and
Temple Inland Mortgage Corporation. The Bank utilizes Fiserv CBS, a third party
vendor, to process substantially all of its data processing functions. The Bank
has contacted its critical vendors, including Temple Inland, and has received
confirmation that they will be Y2K compliant. The Bank is working with Fiserv
CBS and other critical vendors to ensure that their operational and financial
systems will not be adversely effected by the Y2K problem.
The Bank is currently in the validation or testing phase of the Y2K
compliance plan. The Bank developed an extensive test plan that contains test
requirements and criteria, manpower
11
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assignments and target dates. A dedicated local area network specifically for
Y2K testing was established to communicate with the Fiserv CBS test system.
Detailed test scripts designed to test date-related functions are processed on
the system for the FFIEC's recommended critical test dates. The results are
reviewed to ensure the system is functioning properly. Testing with Fiserv CBS
will continue through May 1999. Temple Inland is also testing their systems
currently and has indicated that they will be Y2K compliant.
The Company is currently developing a contingency plan that will be
completed and tested by June 30, 1999 to address a plan of action in the
unlikely event that the Company or its servicers and/or business partners are
not ready for Y2K. The contingency plan will address any required Company
service provider changes or need to outsource to Y2K compliant entities.
The Company has not incurred any significant expenses to date and does
not expect to incur any in conjunction with the Y2K problem.
The Company's plans to complete Y2K compliance are based on
management's and the Board's best estimates. There can be no guarantee that
these estimates will be achieved, and the ending results could be significantly
different due to unforeseen circumstances.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
See "Item 2. Management Discussion and Analysis of Financial Condition
and Results of Operations - Interest Rate Risk".
12
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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
13
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ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K
<TABLE>
<CAPTION>
(a) Exhibit Description
------- -----------
<S> <C>
3(a)(i) Articles of Incorporation of the Company.*
3(a)(ii) Form of Amended and Restated Articles of Incorporation of
the Company.**
3(b) By-laws of the Company.*
4 Specimen of certificate representing Series A Preferred
Shares.*
10(a) Form of Residential Mortgage Loan Purchase and Warranties
Agreement between the Company and the Bank.**
10(b) Form of Commercial Mortgage Loan Purchase and Warranties
Agreement between the Company and the Bank.**
10(c) Residential Mortgage Loan Servicing Agreements between the
Bank and the Servicing Agent.**
10(d) Form of Commercial Mortgage Loan Servicing Agreement between
the Company and the Bank.**
10(e) Form of Advisory Agreement between the Company and the
Bank.**
10(f) Form of Assignment, Assumption and Recognition Agreement
between the Company, the Bank and the Servicing Agent.**
27 Financial Data Schedule.
</TABLE>
- ------------
* Incorporated by reference to the Registration Statement on Form S-11
(File No. 333-31501) of People's Preferred Capital Corporation, as
filed with the Securities and Exchange Commission on July 10, 1997.
** Incorporated by reference to Amendment No. 1 to the Registration
Statement on Form S-11 (File No. 333-31501) of People's Preferred
Capital Corporation, as filed with the Securities and Exchange
Commission on September 8, 1997.
(b) No reports on form 8-K have been filed during the quarter ended March
31, 1999.
14
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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: May 13, 1999
<PAGE>
EXHIBIT INDEX
Exhibit No. Description
- ----------- -----------
27 Financial Data Schedule
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 9
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> MAR-31-1999
<EXCHANGE-RATE> 1
<CASH> 2,417
<INT-BEARING-DEPOSITS> 613
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 0
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 69,346
<ALLOWANCE> 253
<TOTAL-ASSETS> 72,515
<DEPOSITS> 0
<SHORT-TERM> 0
<LIABILITIES-OTHER> 17
<LONG-TERM> 0
0
14
<COMMON> 0
<OTHER-SE> 72,484
<TOTAL-LIABILITIES-AND-EQUITY> 72,515
<INTEREST-LOAN> 1,359
<INTEREST-INVEST> 0
<INTEREST-OTHER> 38
<INTEREST-TOTAL> 1,397
<INTEREST-DEPOSIT> 0
<INTEREST-EXPENSE> 0
<INTEREST-INCOME-NET> 1,397
<LOAN-LOSSES> 0
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 119
<INCOME-PRETAX> 1,278
<INCOME-PRE-EXTRAORDINARY> 1,278
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,278
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<YIELD-ACTUAL> 7.88
<LOANS-NON> 0
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 253
<CHARGE-OFFS> 0
<RECOVERIES> 0
<ALLOWANCE-CLOSE> 253
<ALLOWANCE-DOMESTIC> 253
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
