Form 10-Q Quarterly Report
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES ACT
OF 1934
For the quarterly period ended March 31, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES ACT
OF 1934
Commission File Number: 1-7614
-----------------------------
PMCC FINANCIAL CORP.
(Exact Name of Registrant as Specified in its Charter)
Delaware 11-3404072
(State or other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
66 Powerhouse Rd.
Roslyn Heights, N.Y. 11577
(Address of Principal Executive Offices and Zip Code)
(516) 625-3000
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No ________
Number of shares outstanding of the issuer's Common Stock, par value $.01
per share, as of May 7, 1998: 3,750,000 shares.
<PAGE>
Part I - FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
<CAPTION>
PMCC FINANCIAL CORP. and SUBSIDIARIES
Condensed Consolidated Statements of Operations
(Unaudited)
Three Months Ended March 31,
1998 1997
<S> <C> <C>
Revenues:
Sales of residential rehabilitation properties $8,212,677 $4,224,400
Gains on sale of mortgage loans, net 3,085,390 1,780,264
Interest earned 859,824 115,830
---------- ----------
12,157,891 6,120,494
---------- ----------
Expenses:
Costs of sales, residential rehabilitation properties 7,589,176 3,987,962
Compensation and benefits 2,189,078 1,281,412
Interest expense 900,525 213,162
Other general and administrative 720,313 453,356
---------- ----------
11,399,092 5,935,892
Income before income tax expense 758,799 184,602
Income tax expense 1,128,000 3,250
---------- ----------
Net (Loss) Income $(369,201) $181,352
========== ==========
Pro forma information:
Historical income before income tax $758,799 $184,602
Adjustment to compensation expense for contractual
increase in officers' salary -- (20,200)
Pro forma income before income tax expense 758,799 164,402
Provision for pro forma income taxes (311,000) (67,000)
---------- ----------
Pro forma net income $447,799 $97,402
========== ==========
Pro forma net income per share of common stock-basic $0.15 $0.04
========== ==========
Pro forma net income per share of common stock-diluted $0.14 $0.04
========== ==========
Pro forma weighted average number of shares and
share equivalents outstanding-basic 3,083,333 2,500,000
========== ==========
Pro forma weighted average number of shares and
share equivalents outstanding-diluted 3,176,668 2,500,000
========== ==========
See accompanying notes to unaudited condensed consolidated financial
statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PMCC FINANCIAL CORP. AND SUBSIDIARIES
Condensed Consolidated Statements of Financial Condition
(Unaudited)
March 31, December 31,
1998 1997
<S> <C> <C>
Assets
Cash and cash equivalents $1,655,493 $1,713,405
Receivable from sales of loans 24,786,319 35,130,857
Mortgage loans held for sale, net 39,276,064 18,609,569
Accrued interest receivable 483,782 312,772
Other receivables, net 457,637 398,444
Residential rehabilitation properties 12,959,113 11,584,273
Furniture & equipment, net 318,115 286,713
Prepaid expenses and other assets 505,207 391,299
---------- ----------
Total assets $80,441,730 $68,427,332
========== ==========
Liabilities and shareholders' equity Liabilities:
Notes payable-principally warehouse lines of credit $62,771,438 $59,116,509
Notes payable-shareholder -- 293,163
Due to affiliates 3,303,850 3,084,503
Accrued expenses and other liabilities 1,582,100 1,123,948
Distribution payable 752,000 --
Deferred taxes 1,081,000 --
---------- ----------
Total liabilities 69,490,388 63,618,123
========== ==========
Shareholders' equity
Common stock 37,500 6,250
Additional paid-in capital 10,846,043 711,775
Retained earnings 67,799 4,091,184
---------- ----------
Total shareholders' equity 10,951,342 4,809,209
---------- ----------
Total liabilities and shareholders' equity $80,441,730 $68,427,332
========== ==========
</TABLE>
See accompanying notes to unaudited condensed consolidated financial
statements
<PAGE>
<TABLE>
<CAPTION>
PMCC FINANCIAL CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three months ended March 31,
1998 1997
<S> <C> <C>
Cash flows from operating activities:
Net (loss) income $(369,201) $181,352
Adjustments to reconcile net (loss) income to net cash
used in operating activities:
Residential rehabilitation properties (exclusive of cash
paid directly to/by independent contractors):
Contractual fees received (623,501) (236,438)
Proceeds from sales of properties 8,212,677 4,224,400
Costs of properties acquired (8,964,016) (6,544,763)
Depreciation and amortization 15,500 15,530
(Increase)/decrease in accrued interest receivable (171,010) 3,214
Net increase in mortgage loans held for sale (20,666,495) (6,075,287)
Decrease in receivable from sales of loans 10,344,538 1,108,432
Increase in other receivables (59,193) (225,258)
(Increase) decrease in prepaid expenses and
other assets (113,908) 41,909
Increase in deferred taxes 1,081,000 --
Increase in due to affiliates 219,347 532,724
Increase in accrued expenses and other liabilities 458,152 103,126
----------- -----------
Net cash used in operating activities (10,636,110) (6,901,059)
----------- -----------
Cash flows from investing activities:
Purchase of furniture and equipment (46,902) (45,211)
Principal repayments of mortgage loans held for
investment -- 24,519
----------- -----------
Net cash used in investing activities (46,902) (20,692)
----------- -----------
Cash flows from financing activities:
Distributions to S corporation shareholders, net
of distribution payable (1,919,991) (48,911)
Net proceeds from sale of common stock 9,183,325 --
Net decrease in notes payable-shareholder (293,163) --
Net increase in notes payable-warehouse lines of credit 3,654,929 7,057,051
----------- -----------
Net cash provided by financing activities 10,625,100 7,008,140
----------- -----------
Net (decrease)/increase in cash and cash equivalents (57,912) 86,389
Cash and cash equivalents at beginning of year 1,713,405 409,788
----------- -----------
Cash and cash equivalents at end of year $1,655,493 $496,177
=========== ===========
Supplemental disclosures of cash flow information: Cash paid
during the year for:
Interest $483,248 $169,115
=========== ===========
Income taxes $13,651 $4,188
=========== ===========
</TABLE>
See accompanying notes to unaudited condensed consolidated financial
statements.
<PAGE>
PMCC FINANCIAL CORP. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 1998
(Unaudited)
1. Basis of Presentation
The unaudited condensed consolidated financial statements included herein
reflect all adjustments, which are, in the opinion of management necessary for a
fair presentation of the Company's financial condition as of the dates indicated
and the results of operations for the periods shown. In preparing the
accompanying condensed consolidated financial statements, management is required
to make estimates and assumptions that reflect the reported amounts of assets
and liabilities as of the date of the condensed consolidated statements of
financial condition and of income and expenses for the periods presented in the
condensed consolidated statements of operations. The results of operations for
the three months ended March 31, 1998 are not necessarily indicative of the
results of operations to be expected for the remainder of the year. Certain
information and note disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have been
condensed or omitted pursuant to rules and regulations of the Securities and
Exchange Commission.
These unaudited condensed consolidated financial statements should be read
in conjunction with the audited consolidated financial statements and notes
thereto included in the Company's Form 10-K for the year ended December 31,
1997.
Certain reclassifications have been made to conform the prior period's
presentation to the current presentation.
2. Initial Public Offering
On February 18, 1998 the shareholders of Premier Mortgage Corp. ("Premier")
exchanged all of their outstanding shares of common stock for 2,500,000 shares
of the Company. Following this exchange, the Company completed an initial public
offering of 1,250,000 new shares of common stock at a price of $9 per share. The
Company received gross proceeds of $11,250,000 and net proceeds of $9,183,000.
In addition, upon the exchange, Premier declared a distribution to its
existing shareholders in an amount equal to its undistributed S corporation
earnings that resulted in Premier's shareholders' equity equaling $1.7 million
at the date of the initial public offering. This distribution totaled
approximately $2.7 million. Approximately $1.9 million of this distribution,
including $1 million from the proceeds of the initial public offering, was paid
during the quarter ended March 31, 1998. The remaining $752,000 of this
distribution is payable in a promissory note bearing interest at 10% per annum,
payable in four equal quarterly installments. The final payment is due February
18, 1999. The remaining undistributed S corporation earnings were reclassified
from retained earnings to additional paid in capital.
3. Income Taxes
Prior to February 18, 1998, certain of the Company's subsidiaries had
elected to be treated as S corporations for both federal and state income tax
purposes. As a result, the income of the subsidiaries through February 18, 1998
was taxed directly to the individual shareholders. On February 18, 1998, in
conjunction with the Company's initial public offering, the S corporation
elections were terminated and the Company's subsidiaries became C corporations
for federal and state income tax purposes and, as such, became subject to
federal and state income taxes on their taxable income for the periods after
February 18, 1998. Therefore, the provision for income taxes for the three
months ended March 31, 1998 includes a provision for deferred income taxes of
$1,081,000 related to the temporary differences existing at the termination of
the S corporation elections, and pro forma net income for the three months ended
March 31, 1998 and 1997 include pro forma income taxes as if the Company had
been taxed as a C corporation throughout the periods.
<PAGE>
4. Earnings Per Share of Common Stock
Effective December 31, 1997, the Company adopted SFAS No. 128, "Earnings
Per Share". This statement establishes standards for computing and presenting
EPS for entities with publicly held common stock and common stock equivalents.
This statement requires a reconciliation of the numerator and denominator of the
EPS calculation presented.
Basic EPS is determined by dividing pro forma net income for the period by
the weighted average number of common shares outstanding during the same period.
Diluted EPS reflects the potential dilution that could occur if securities or
other contracts to issue common stock were exercised or converted into common
stock or resulted in the issuance of common stock which would then share in the
earnings of the Company. The additional number of shares included in the
calculation of pro forma diluted EPS arising from issued stock options was
93,335 shares and 0 shares, respectively, for the three months ended March 31,
1998 and 1997.
Actual earnings per share data for periods prior to February 18, 1998 have
not been presented in the accompanying unaudited condensed consolidated
statement of operations because the Company was not a public company. Actual
earnings per share data for the period February 18, 1998 to March 31, 1998 have
not been presented in the accompanying unaudited condensed consolidated
statement of operations because management believes that such data would not be
meaningful given the relatively short time period and the impact of the
recognition of a deferred tax liability in connection with the change in tax
status.
5. Supplemental Information
The Company's operations consist of two principal activities (a) mortgage
banking and (b) funding the purchase, rehabilitation and resale of residential
real estate. The following table sets forth certain information concerning these
activities (in thousands):
<TABLE>
<CAPTION>
Quarter Ended March 31,
1998 1997
<S> <C> <C>
Revenues:
Residential rehabilitation properties $8,213 $4,224
Mortgage banking 3,945 1,896
------ -------
$12,158 $6,120
====== =======
Less: (1)
Expenses allocable to residential rehabil-
itation properties (cost of sales, interest
expense and compensation and benefits) 7,918 4,085
Expenses allocable to mortgage banking
(all other) 3,481 1,851
------ -------
$11,399 $5,936
====== =======
Operating Profit:
Residential rehabilitation properties 295 139
Mortgage banking 464 45
------ -------
$759 $184
====== =======
Identifiable Assets (at March 31, 1998 and
December 31, 1997, respectively):
Residential rehabilitation properties $12,959 $11,584
Mortgage banking 67,483 56,843
------ -------
$80,442 $68,427
====== =======
</TABLE>
(1) In managing its business, the Company does not allocate corporate
expenses other than interest and compensation and benefits to its various
activities.
<PAGE>
6. Common Stock
The authorized common stock of the Company consists of 1 million shares of
preferred stock, par value $.01, none of which is presently issued, and 40
million shares of common stock, par value $.01, of which 3,750,000 shares are
issued and outstanding at March 31, 1998. Prior to the February 18, 1998 initial
public offering, Premier had 2,500 authorized shares of Class A common stock, of
which 100 shares were issued and outstanding at December 31, 1997, and 1,000
authorized shares of Class B common stock, of which 25 shares were issued and
outstanding at December 31, 1997. In conjunction with the initial public
offering, both classes of Premier's common stock were exchanged by their
shareholders' for shares of the Company.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Forward-Looking Statements
The Private Securities Litigation Reform Act of 1995 provides a "safe
harbor" for certain forward-looking statements. This Quarterly Report on Form
10-Q may contain forward-looking statements which reflect the Company's current
views with respect to future events and financial performance. These
forward-looking statements are subject to certain risks and uncertainties,
including those identified below, which could cause actual results to differ
materially from historical results or those anticipated. The words "believe,"
"expect," "anticipate," "intend," "estimate," and other expressions which
indicate future events and trends identify forward-looking statements. Readers
are cautioned not to place undue reliance upon these forward-looking statements,
which speak only as of their dates. The Company undertakes no obligation to
publicly update or revise any forward-looking statements, whether as the result
of new information, future events or otherwise. The following factors could
cause actual results to differ materially from historical results or those
anticipated: (1) the level of demand for mortgage credit, which is affected by
such external factors as the level of interest rates, the strength of various
segments of the economy and demographics of the Company's lending markets; (2)
the direction of interest rates; (3) the relationship between mortgage interest
rates and cost of funds; (4) federal and state regulation of the Company's
mortgage banking operations; (5) competition within the mortgage banking
industry and (6) the Company's management of rapid growth and expansion.
Results of Operations
Quarter Ended March 31, 1998 Compared to Quarter Ended March 31, 1997
Revenues. The following table sets forth the components of the Company's
revenues for the periods indicated:
<TABLE>
<CAPTION>
Quarters Ended March 31,
1998 1997
<S> <C> <C>
Sales of residential rehabilitation properties $8,212,677 $4,224,400
Gains of sales of mortgage loans, net 3,085,390 1,780,264
Interest earned 859,824 115,830
---------- ---------
Total revenues $12,157,891 $6,120,494
========== =========
</TABLE>
Revenues from the sale of residential rehabilitation properties increased
$4.0 million, or 94%, to $8.2 million for the quarter ended March 31, 1998 from
$4.2 million for the quarter ended March 31, 1997. This increase was primarily
the result of the increase in the number of residential rehabilitation
properties sold to 53 for the quarter ended March 31, 1998 from 28 for the
quarter ended March 31, 1997.
<PAGE>
Gains on sales of mortgage loans increased $1.3 million, or 73%, to $3.1
million for the quarter ended March 31, 1998 from $1.8 million for the quarter
ended March 31, 1997. This increase was primarily due to (a) increased loan
originations and loan sales from the Company's existing retail offices, and (b)
loan originations and sales by the Company's B-C-D division, which commenced
operations in April 1997. Mortgage loan originations were $100.5 million and
$37.4 million for the quarters ended March 31, 1998 and 1997, respectively. For
the quarter ended March 31, 1998, approximately 45% of the Company's mortgage
originations were derived from its retail mortgage operations and approximately
55% from its wholesale operations. The following table summarizes the Company's
mortgage originations (in millions):
Quarters Ended March 31,
1998 1997
Conventional $62,382 $23,431
FHA/VA 21,527 14,012
BCD 16,627 -
------ ------
Total $100,536 $37,443
====== ======
Although there can be no assurance thereof, the Company expects mortgage
originations to increase and therefore believes its gains on sales of mortgage
loans will increase.
Interest earned increased $744,000, or 642%, to $860,000 for the quarter
ended March 31, 1998 from $116,000 for the quarter ended March 31, 1997. This
increase was primarily due to increased mortgage originations for the quarter
ended March 31, 1998 as compared to the quarter ended March 31, 1997 and an
increase in the amount of B-C-D mortgage originations which generally are held
for sale longer than conventional mortgage originations.
Expenses. The following table sets forth the Company's expenses for the
periods indicated:
<TABLE>
<CAPTION>
Quarters Ended March 31,
1998 1997
<S> <C> <C>
Cost of sales - residential rehabilitation properties $7,589,176 $3,987,962
Compensation and benefits 2,189,078 1,281,412
Interest expense 900,525 213,162
Other general and administrative 720,313 453,356
---------- ----------
Total expenses $11,399,092 $5,935,892
========== ==========
</TABLE>
<PAGE>
Cost of sales - residential rehabilitation properties increased $3.6
million, or 90%, to $7.6 million for the quarter ended March 31, 1998 from $4.0
million for the quarter ended March 31, 1997. This increase was primarily due to
the increase in the number of properties purchased, rehabilitated and sold.
Compensation and benefits increased $908,000, or 71%, to $2.2 million for
the quarter ended March 31, 1998 from $1.3 million for the quarter ended March
31,1997. This increase was primarily due to increased sales salaries and
commission, which are based substantially on mortgage loan originations. Total
personnel increased to 107 employees at March 31, 1998 from 64 at March 31,
1997.
Interest expense increased $687,000, or 322%, for the period ended March
31, 1998 from $213,000 for the quarter ended March 31, 1997. Approximately
$160,000 of this increase was attributable to the funding of residential
rehabilitation properties. The remainder of the increase was attributable to the
increase in mortgage originations funded through the Company's warehouse
facility.
Other general and administrative expense increased $267,000, or 59%, to
$720,000 for the quarter ended March 31, 1998 from $453,000 for the quarter
ended March 31, 1997. This increase was primarily due to increased expenses
incurred in connection with the growth in the operations of the Company
including rent and facilities expense, telephone and marketing.
Although there can be no assurance thereof, the Company believes that the
expected increase in mortgage origination volume and residential rehabilitation
activities will result in increased expenses.
Pro forma net income increased $350,000, or 360%, to $448,000 for the
quarter ended March 31, 1998 from $97,000 for the quarter ended March 31, 1997.
Net income decreased $550,000 to a net loss of $(369,000) for the three months
ended March 31, 1998 from net income of $181,000 for the three months ended
March 31, 1997. The quarter ended March 31, 1998 includes deferred income tax
expense of $1,081,000 related to the change in tax status of the Company's
subsidiaries from S corporations to C corporations.
<PAGE>
Liquidity and Capital Resources
The Company's principal financing needs consist of funding mortgage loan
originations and residential rehabilitation properties. To meet these needs, the
Company currently relies on borrowings under a warehouse line of credit (the
"Warehouse Facility"), borrowings from affiliates and cash flow from operations.
The amount of outstanding borrowings under the warehouse facility at March 31,
1998 were $62.8 million. The mortgage loans and residential rehabilitation
properties, funded with the proceeds from such borrowings, secure the Warehouse
Facility. Borrowings from affiliates are secured by mortgages on the residential
rehabilitation properties for which monies were borrowed.
The interest rate charged for borrowings under the Warehouse Facility is
LIBOR plus 21/4% on fixed rate loans and LIBOR plus 2% on adjustable rate
mortgages. The Warehouse Facility is funded by two commercial banks and expires
on May 31, 1998. The Warehouse Facility, as amended, allows the Company to
borrow $65 million until expiration. The Company is currently negotiating a new
warehouse line of credit.
On April 17, 1998, the Company entered into a Senior Secured Credit
Agreement with Chase Bank of Texas, National Association (the "Chase
Warehouse"). The Chase Warehouse provides an additional warehouse line of credit
of $20 million for its mortgage originations. This Chase Warehouse is secured by
the mortgage loans funded with the proceeds of such borrowings. The interest
rate charged for borrowings under the Chase Warehouse is LIBOR plus 11/4% on
conventional and FHA/VA loans an LIBOR plus 1 5/8% for BCD loans. The Chase
Warehouse expires on October 14, 1998.
The Warehouse Facility and the Chase Warehouse contain certain covenants
limiting indebtedness, liens, mergers, changes in control and sales of assets
and requires the Company to maintain minimum net worth and other financial
ratios. The Company expects to be able to renew or replace the Warehouse
Facility and the Chase Warehouse when the current terms expire.
Since September 1, 1996, the Company has borrowed funds from corporations
owned by Ronald Friedman (President, Chief Executive Officer and a Director of
the Company) and Robert Friedman (Chairman of the Board of Directors, Chief
Operating Officer, Secretary and Treasurer of the Company) to provide for
funding of residential rehabilitation properties and working capital purposes.
At March 31, 1998, borrowings from these affiliates totaled $3.3 million.
Interest on borrowings from affiliates is 10% per annum and certain of the
Company's residential rehabilitation properties secure the borrowings.
On February 18, 1998 the Company completed an initial public offering of
new shares of common stock at a price of $9 per share. The Company received
gross proceeds of $11,250,000 and net proceeds of approximately $9.2 million.
The proceeds from this offering were used for funding mortgage originations and
residential rehabilitation properties, working capital and an S Corporation
distribution.
Net cash used in operations for the quarter ended March 31, 1998 was $10.6
million. The Company used cash to fund the $20.7 million increase in mortgage
loans held for sale, offset, in part, by the decrease in receivable from sales
of loans of $10.3 million and $1.4 million net increase in residential
rehabilitation properties. The increases in these assets were financed by
increased borrowings under the Warehouse Facility, and the proceeds from the
initial public offering.
<PAGE>
In April 1998, the Company entered into a $20 million Mortgage Loan and
Purchase Sale Agreement (the "Gestation Agreement") with a financial
institution. The Gestation Agreement permits the Company to lower its borrowing
costs and provides additional liquidity to the Company. The Gestation Agreement
initially allows the Company to fund its conventional and FHA/VA mortgage
originations. The Company's borrowing costs under this facility is LIBOR plus
1%. Either party may terminate this agreement at any time upon notice. The
Company believes that other institutions provide similar funding programs and in
the event its current arrangement were to terminate, the Company believes that
it will be able to enter into similar arrangements.
Impact of New Accounting Standards
In June 1997, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards No. 130 ("SFAS 130"), "Reporting
Comprehensive Income". SFAS 130 is effective for fiscal years beginning after
December 15, 1997 and requires the reclassification of financial statements for
earlier periods provided for comparative purposes. The statement establishes
standards for reporting and display of comprehensive income and its components.
This statement requires that all items that are to be recognized as components
of comprehensive income be reported in a financial statement that is displayed
with the same prominence as other financial statements. Comprehensive income is
defined as all changes in equity during a period except those resulting from
investments by owners and distributions to owners. The Company has determined
that the requirements of SFAS 130 will have no impact on its financial condition
or results of operations.
In June 1997, the FASB issued SFAS No. 131, "Disclosures about Segments of
an Enterprise and Related Information". SFAS 131 is effective for fiscal years
beginning after December 15, 1997. In the initial year of application,
comparative information for earlier years is to be restated, unless it is
impracticable to do so. The statement requires that a public business enterprise
report financial and descriptive information about its reportable operating
segments. As the requirements of SFAS 131 are disclosure related, its
implementation will have no impact on the Company's financial condition or
results of operations.
<PAGE>
PART II-OTHER INFORMATION
Item 1. Legal Proceedings
The Registrant is a defendant in certain litigation arising in the normal
course of its business. In the opinion of the Registrant, any potential
liability with respect to such legal actions will not, individually or in the
aggregate, be material to the Registrant's financial position, liquidity or
future results of operations.
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) Exhibits
See accompanying Index to Exhibits.
<PAGE>
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.
PMCC FINANCIAL CORP.
(Registrant)
/s/ Ronald Friedman
---------------------
President and Chief Executive Officer
/s/ Timothy J. Mayette
----------------------
Chief Financial Officer
(Principal Accounting Officer)
Dated: May 14, 1998
<PAGE>
INDEX TO EXHIBITS
Exhibits Sequential Page Number
Senior Secured Credit Agreement
with Chase Bank of Texas, National Association 10.21*
Mortgage Loan and Purchase Sale Agreement
with Prudential Securities Realty Funding Corporation 10.22*
* To be filed as an amendment
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0001048275
<NAME> PMCC FINANCIAL CORP.
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-1-1998
<PERIOD-END> MAR-31-1998
<CASH> 1,655,493
<SECURITIES> 0
<RECEIVABLES> 65,003,802
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 80,123,615
<PP&E> 318,115
<DEPRECIATION> 0
<TOTAL-ASSETS> 80,441,730
<CURRENT-LIABILITIES> 69,490,388
<BONDS> 0
0
0
<COMMON> 37,500
<OTHER-SE> 10,913,842
<TOTAL-LIABILITY-AND-EQUITY> 80,441,730
<SALES> 0
<TOTAL-REVENUES> 12,157,891
<CGS> 0
<TOTAL-COSTS> 10,498,567
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 900,525
<INCOME-PRETAX> 758,799
<INCOME-TAX> 1,128,000
<INCOME-CONTINUING> (369,201)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (369,201)
<EPS-PRIMARY> 0.15
<EPS-DILUTED> 0.14
</TABLE>
