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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to __________
Commission File Number 000-23849
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UNION PLANTERS MORTGAGE FINANCE CORP.
(Exact name of registrant as specified in its charter)
Delaware 62-1712370
- ---------------------------------- ---------------------------------
(State or other Jurisdiction of (IRS Employer Identification No.)
Incorporation or Organization)
Union Planters Administrative Center
7130 Goodlett Farms Parkway
Cordova, Tennessee 38018
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(Address of principal executive offices)
Registrant's telephone number, including area code: (901) 580-6000
----------------
N/A
(former name)
Indicate by check mark whether the Registrant (i) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such short period that the Registrant was
required to file such report), and (ii) has been subject to such filing
requirements for the past 90 days:
Yes [X] No [ ]
As of April 30, 2000, the latest practicable date, there were 1,000 shares of
Union Planters Mortgage Finance Corp. common stock outstanding.
The registrant meets the conditions set forth in General Instruction H(1)(a) and
(b) of Form 10-Q and is therefore filing this Form 10-Q with the reduced
disclosure format.
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UNION PLANTERS MORTGAGE FINANCE CORP.
FORM 10-Q
INDEX
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Page
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Balance Sheet March 31, 2000 and December 31, 1999..........................3
Statement of Operations for the three months
ended March 31, 2000 and 1999 ..............................................4
Statement of Changes in Shareholder's Equity
for the three months ended March 31, 2000 and 1999 .........................5
Statement of Cash Flows for the three months
ended March 31, 2000 and 1999 ..............................................6
Notes to Unaudited Financial Statements.....................................7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations...............................8
PART II. OTHER INFORMATION
Item 1. Legal Proceedings...........................................................9
Item 5. Other Information...........................................................9
Item 6. Exhibits and Reports on Form 8-K............................................9
Signatures...........................................................................11
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UNION PLANTERS MORTGAGE FINANCE CORP.
BALANCE SHEET
(UNAUDITED)
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
2000 1999
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(DOLLARS IN THOUSANDS)
<S> <C> <C>
Cash ................................................ $ 487 $ 489
Deferred income taxes ............................... 45 45
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TOTAL ASSETS .............................. $ 532 $ 534
============ ============
Accrued expenses .................................... $ 127 $ 128
Tax and other payables to affiliates ................ 45 46
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TOTAL LIABILITIES ......................... 172 174
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Shareholder's equity
Common stock, par value $.01 per share,
1,000 shares authorized, issued, and outstanding -- --
Additional paid-in capital ........................ 10 10
Retained earnings ................................. 350 350
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TOTAL SHAREHOLDER'S EQUITY ................ 360 360
------------ ------------
TOTAL LIABILITIES AND SHAREHOLDER'S EQUITY $ 532 $ 534
============ ============
</TABLE>
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The accompanying notes are an integral part of these financial statements.
3
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UNION PLANTERS MORTGAGE FINANCE CORP.
STATEMENT OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
----------------------
2000 1999
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(DOLLARS IN THOUSANDS)
<S> <C> <C>
NONINTEREST INCOME
Net gain on the sale of residential mortgages $ -- $ 4,442
-------- --------
EARNINGS BEFORE INCOME TAXES ........ -- 4,442
Income taxes .................................. -- 1,555
-------- --------
NET EARNINGS ......................... $ -- $ 2,887
======== ========
</TABLE>
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The accompanying notes are an integral part of these financial statements.
4
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UNION PLANTERS MORTGAGE FINANCE CORP.
STATEMENT OF CHANGES IN SHAREHOLDER'S EQUITY
(UNAUDITED)
<TABLE>
<CAPTION>
ADDITIONAL
COMMON PAID-IN RETAINED
STOCK CAPITAL EARNINGS TOTAL
---------- ---------- ---------- ----------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
BALANCE, JANUARY 1, 2000 ... $ -- $ 10 $ 350 $ 360
Net earnings ............... -- -- -- --
---------- ---------- ---------- ----------
BALANCE, MARCH 31, 2000 .... $ -- $ 10 $ 350 $ 360
========== ========== ========== ==========
</TABLE>
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The accompanying notes are an integral part of these financial statements.
5
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UNION PLANTERS MORTGAGE FINANCE CORP.
STATEMENT OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
-------------------------
2000 1999
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(DOLLARS IN THOUSANDS)
<S> <C> <C>
OPERATING ACTIVITIES
Net earnings ............................................... $ -- $ 2,887
Deferred income tax benefit ................................ -- (107)
Gain on sale of loans ...................................... -- (4,442)
Net increase (decrease) in other liabilities ............... (2) 2,059
--------- ---------
Net cash provided (used) by operating activities ... (2) 397
--------- ---------
INVESTING ACTIVITIES
Purchase of loans from parent company ...................... -- (132,467)
Proceeds from sale of loans to a trust ..................... -- 136,909
--------- ---------
Net cash provided by investing activities .......... -- 4,442
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FINANCING ACTIVITIES
Issuance of notes payable to parent company ................ -- 132,467
Repayment of notes payable to parent company ............... -- (132,467)
--------- ---------
Net cash used by financing activities .............. -- --
--------- ---------
Net increase (decrease) in cash .............................. (2) 4,839
Cash at beginning of period .................................. 489 502
--------- ---------
Cash at end of period ........................................ $ 487 $ 5,341
========= =========
</TABLE>
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The accompanying notes are an integral part of these financial statements.
6
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UNION PLANTERS MORTGAGE FINANCE CORP.
NOTES TO FINANCIAL STATEMENTS
NOTE 1. BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION. The financial statements include the accounts of
the Company. The Company was established September 5, 1997 as a wholly owned,
limited-purpose finance subsidiary of Union Planters Bank, National Association
(the "Bank"), which in turn is a subsidiary of Union Planters Corporation
("UPC"). The Company was organized to facilitate the securitization of loans and
other assets through the issuance and sale of collateralized bonds and
pass-through securities through trusts established by the Company. Securities
issued through trusts will be secured primarily by residential mortgage loans
and mortgage-backed certificates of various types. These financial statements do
not include the accounts of the trusts established to carry out the issuance and
sale of collateralized bonds and pass-through securities.
USE OF ESTIMATES. The accounting and reporting policies of Union Planters
Mortgage Finance Corp. (the "Company") conform with generally accepted
accounting principles and general practice within the financial services
industry in the United States. The preparation of financial statements in
accordance with generally accepted accounting principles requires management to
make estimates and assumptions that affect the amounts reported in the financial
statements and accompanying notes; actual results could differ from these
estimates.
NOTE 2. SALE OF LOANS
In February 1999, the Company securitized approximately $132 million in
principal amount of previously defaulted FHA insured and VA guaranteed mortgage
loans serviced by the Bank. The transaction was accounted for as a sale in
accordance with the provisions of Statement of Financial Accounting Standards
("SFAS") No. 125, "Accounting for Transfer and Servicing of Financial Assets and
Extinguishment of Liabilities." There were no securitizations in the first
quarter of 2000. The following summarizes the gain for the three months ended
March 31, 1999:
<TABLE>
<CAPTION>
<S> <C>
Proceeds from sale of loans ............. $ 137,817
Principal balance of loans .............. (132,467)
---------
Gain ............................ 5,350
Costs ................................... (908)
---------
Net gain on the sale of loans ... $ 4,442
=========
</TABLE>
NOTE 3. INCOME TAXES
Income taxes are computed on a separate company basis. The Company will
file a consolidated federal income tax return with the Bank and UPC. Deferred
income taxes are provided in accordance with SFAS No. 109, "Accounting for
Income Taxes." The components of income tax expense for the three months ended
March 31, 1999 are as follows:
<TABLE>
<CAPTION>
<S> <C>
Current .............................. $ 1,662
Deferred ............................. (107)
-------
Total income tax expense ... $ 1,555
=======
</TABLE>
The deferred tax asset is composed of accrued expenses that have not been
paid. The Company's effective tax rate does not differ from the federal
statutory rate of 35%.
7
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
UNION PLANTERS MORTGAGE FINANCE CORP.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis should be read in conjunction with
the financial statements and related notes thereto.
GENERAL
Union Planters Mortgage Finance Corp. (the "Company") was established
September 5, 1997 as a wholly owned, limited purpose, finance subsidiary of
Union Planters Bank, National Association (the "Bank"), which in turn is a
subsidiary of Union Planters Corporation. There was essentially no business
activity on the part of the Company until May 1998. The Company was organized to
facilitate the securitization of loans and other assets through the issuance and
sale of collateralized bonds and pass-through securities. Securities issued will
be secured primarily by residential mortgage loans and mortgage-backed
certificates of various types. In the future, the Company may finance other
types of loans and assets.
There were no transactions in the first quarter of 2000.
In February 1999, the Company securitized approximately $132 million in
principal amount of previously defaulted FHA-insured and VA-guaranteed mortgage
loans serviced by the Bank. The loans securitized had a weighted-average
maturity of 222 months and a weighted-average interest rate of 9.67% per annum.
The loans will continue to be serviced by the Bank for a one percent fee.
Affiliates of the Company purchased all of the subordinated securities issued in
this transaction, with an approximate market value of $9.3 million. This
securitization, treated as a sale, resulted in a total gain of approximately
$5.4 million before costs and expenses. Securitization costs and expenses
accrued by the Company were approximately $954,000 and at March 31, 1999, the
balance of the accrual was $405,000. Securitization costs and expenses included
underwriting costs, legal and accounting fees, as well as cost to prepare,
record and deliver loan documents and files. Credit losses not covered by
insurance or guarantees are absorbed by subordinated security holders or, in
limited circumstances, the Bank as servicer. Therefore, the Company carries no
loan loss reserves.
8
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UNION PLANTERS MORTGAGE FINANCE CORP.
PART II - OTHER INFORMATION
ITEM 1 -- LEGAL PROCEEDINGS
None.
ITEM 5 -- OTHER INFORMATION
None.
ITEM 6 -- EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS
3.1 Certificate of Incorporation of the Registrant (Incorporated herein
by reference to the Exhibits to Registrant's Registration Statement
No. 333-35471 on Form S-3, filed September 12, 1997).
3.2 Amended and Restated Bylaws of the Registrant (Incorporated herein by
reference to the Exhibits to Pre-Effective Amendment No. 3 to the
Registrant's Registration Statement No. 333-35471 on Form S-3, filed
January 16, 1998).
4.1 Standard Terms to Pooling and Servicing Agreement (January 1998
Edition) (Incorporated herein by reference to the Exhibits to
Pre-Effective Amendment No. 3 to the Registrant's Registration
Statement No. 333-35471 on Form S-3, filed January 16, 1998).
4.2 Form of Indenture between Registrant and Trustee (Incorporated herein
by reference to the Exhibits to Pre-Effective Amendment No. 3 to the
Registrant's Registration Statement No. 333-35471 on Form S-3, filed
January 16, 1998).
4.3 Form of Trust Agreement between Registrant and Trustee (Incorporated
herein by reference to the Exhibits to Pre-Effective Amendment No. 3
to the Registrant's Registration Statement No. 333-35471 on Form S-3,
filed January 16, 1998).
4.4 Form of Deposit Trust Agreement between Registrant and Trustee
(Incorporated herein by reference to the Exhibits to Pre-Effective
Amendment No. 3 to the Registrant's Registration Statement No.
333-35471 on Form S-3, filed January 16, 1998).
4.5 Standard Terms to Pooling and Servicing Agreement (May 1998 Edition)
(Incorporated herein by reference to Exhibit to the Registrant's
Current Report on Form 8-K , filed June 11, 1998).
4.6 Copy of the Series 1998-1 Pooling and Servicing Agreement, dated as
of May 1, 1998, by and among the Registrant, Union Planters Bank,
N.A., as Master Servicer, The Bank of New York, as Contract of
Insurance Holder, and The Bank of New York, as Trustee (Incorporated
herein by reference to Exhibit to the Registrant's Current Report on
Form 8-K , filed June 11, 1998).
4.7 Copy of Series 1999-1 Pooling and Servicing Agreement, dated as of
February 1, 1999, by and among the Registrant, Union Planters Bank,
N.A., as Master Servicer, and Contract of Insurance Holder, and The
Bank of New York, as Trustee (Incorporated herein by reference to
Exhibit to the Registrant's Current Report on Form 8-K, filed March
2, 1999).
27 Financial Data Schedule (for SEC use only)
9
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99.1 Form of Sales Agreement between the Registrant, as Purchaser, and the
Seller (Incorporated herein by reference to the Exhibits to
Pre-Effective Amendment No. 3 to the Registrant's Registration
Statement No. 333-35471 on Form S-3, filed January 16, 1998).
99.2 Form of Supplemental Servicing Agreement (Incorporated herein by
reference to the Exhibits to Pre-Effective Amendment No. 3 to the
Registrant's Registration Statement No. 333-35471 on Form S-3, filed
January 16, 1998).
(b) REPORTS ON FORM 8-K
None.
10
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SIGNATURE
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 hereunto duly authorized.
UNION PLANTERS MORTGAGE FINANCE CORP.
(REGISTRANT)
Date: May 5, 2000 By: /s/ Douglas R. Miller
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Douglas R. Miller
President and
Chief Executive Officer
By: /s/ Mark Mosteller
----------------------------------
Mark Mosteller
Executive Vice President and
Chief Operating Officer
11
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<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF UNION PLANTERS MORTGAGE FINANCE CORPORATION FOR THE
THREE MONTH PERIOD ENDED MARCH 31, 2000 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<EXCHANGE-RATE> 1
<CASH> 487
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 0
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 0
<ALLOWANCE> 0
<TOTAL-ASSETS> 532
<DEPOSITS> 0
<SHORT-TERM> 0
<LIABILITIES-OTHER> 172
<LONG-TERM> 0
0
0
<COMMON> 0
<OTHER-SE> 360
<TOTAL-LIABILITIES-AND-EQUITY> 532
<INTEREST-LOAN> 0
<INTEREST-INVEST> 0
<INTEREST-OTHER> 0
<INTEREST-TOTAL> 0
<INTEREST-DEPOSIT> 0
<INTEREST-EXPENSE> 0
<INTEREST-INCOME-NET> 0
<LOAN-LOSSES> 0
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 0
<INCOME-PRETAX> 0
<INCOME-PRE-EXTRAORDINARY> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 0
<EPS-BASIC> 0
<EPS-DILUTED> 0
<YIELD-ACTUAL> 0
<LOANS-NON> 0
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 0
<CHARGE-OFFS> 0
<RECOVERIES> 0
<ALLOWANCE-CLOSE> 0
<ALLOWANCE-DOMESTIC> 0
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
