<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR QUARTER ENDED MARCH 31, 1995
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the period from __________ to __________
Commission File Number 0-4559
BEVERLY HILLS BANCORP
(Exact name of registrant as specified in its charter)
CALIFORNIA 95-2588374
(State of Incorporation) (I.R.S. Employer Identification Number)
100 WILSHIRE BOULEVARD, SUITE 1940, SANTA MONICA, CA 90401
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 310-395-7754
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 of Common Stock, $1.00 par value, outstanding as of March 31,
1995: 1,194,432.
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BEVERLY HILLS BANCORP
TABLE OF CONTENTS
<TABLE>
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Page
PART I. Financial Information Number
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Item 1. Financial Statements
Condensed Consolidated Financial
Statements 3
Condensed Consolidated Balance Sheet --
March 31, 1995 4
Condensed Consolidated Statements of
Operations -- For the Three Months
Ended March 31, 1995 and 1994 5
Condensed Consolidated Statements of
Cash Flows -- For the Three Months
Ended March 31, 1995 and 1994 6
Notes to Condensed Consolidated Financial
Statements 7-8
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 9-10
PART II. Other Information
Item 1. Legal Proceedings 11
Item 2. Exhibits and Reports on Form 8-K 11
SIGNATURE 12
</TABLE>
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PART I. Financial Information
Item 1. Beverly Hills Bancorp -- Financial Statements
Condensed Consolidated Financial Statements
(Unaudited)
The Condensed Consolidated Financial Statements included herein have been
prepared by Beverly Hills Bancorp (the "Company"), without audit, pursuant to
the rules and regulations of the Securities and Exchange Commission. Certain
information and footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have been
condensed or omitted pursuant to such rules and regulations, although the
Company believes the disclosures which are made are adequate to make the
information presented not misleading. Further, the Condensed Consolidated
Financial Statements have been prepared in accordance with generally accepted
accounting principles for interim financial information, the instructions to
Form 10-QSB and Regulation S-B (including Item 310(b) thereof) and reflect, in
the opinion of management, all adjustments necessary to present fairly the
financial position and results of operations as of and for the periods
indicated.
It is suggested that these Condensed Consolidated Financial Statements be
read in conjunction with the Consolidated Financial Statements and the Notes
thereto for the year ended December 31, 1994, included in the Beverly Hills
Bancorp Form 10-KSB Annual Report to the Securities and Exchange Commission.
The results of operations for the three months ended March 31, 1995 are not
necessarily indicative of results to be expected for the entire year ending
December 31, 1995.
See Item 2 - "Management's Discussion and Analysis of Financial Condition
and Results of Operations."
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BEVERLY HILLS BANCORP AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
(UNAUDITED)
MARCH 31, 1995
<TABLE>
<CAPTION>
ASSETS
<S> <C>
Cash and Cash Equivalents $1,711,000
Notes Receivable - Officer/Shareholder 250,000
Notes Receivable - Sixty Eight Thousand, Inc.
less allowance for loss of $185,000 200,000
Investment in Tigera Group, Inc., at equity 3,372,000
Investment, at cost 200,000
----------
Total Assets $5,733,000
==========
LIABILITIES AND
STOCKHOLDERS' EQUITY
Accounts Payable and Accrued Liabilities $ 98,000
----------
Total Liabilities 98,000
----------
Commitments & Contingencies
Minority Interests 507,000
----------
Stockholders' Equity:
Preferred Stock - without par value;
authorized 500,000 shares, none issued
Common Stock - $1 par value; authorized
3,500,000 shares; issued and outstanding
1,194,432 shares - stated value 1,434,000
Capital Surplus 3,450,000
Retained Earnings Accumulated Since
July 1, 1985 244,000
----------
Total Stockholders' Equity 5,128,000
----------
Total Liabilities and Stockholders' Equity $5,733,000
==========
</TABLE>
See Accompanying Notes to Condensed Consolidated Financial Statements.
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BEVERLY HILLS BANCORP AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED
--------------------------
MARCH 31,
--------------------------
1995 1994
----------- -----------
<S> <C> <C>
Income:
Interest, Dividend and Other $ 66,000 $ 48,000
Equity in Loss of Investment (10,000) (14,000)
----------- -----------
Total Income 56,000 34,000
----------- -----------
Operating Expenses:
General and Administrative 97,000 83,000
Amortization of Excess Cost of Investment 44,000 44,000
----------- -----------
Total Expenses 141,000 127,000
----------- -----------
Loss Before Minority Interests (85,000) (93,000)
Minority Interest in Subsidiaries' Losses 1,000 3,000
----------- -----------
Net Loss $ (84,000) $ (90,000)
=========== ===========
Net Loss Per Share $ (.07) $ (.08)
=========== ===========
Weighted Average Number of Common
Shares Outstanding 1,194,432 1,194,432
=========== ===========
</TABLE>
See Accompanying Notes to Condensed Consolidated Financial Statements.
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BEVERLY HILLS BANCORP AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED
--------------------------
MARCH 31,
--------------------------
1995 1994
----------- -----------
<S> <C> <C>
Cash Flows from Operating Activities:
Net Loss $ (84,000) $ (90,000)
Adjustments to Reconcile Net Loss to Net
Cash Used in Operating Activities:
Equity in Loss of Investment 10,000 14,000
Amortization of Excess Cost of Investment 44,000 44,000
Minority Interest in Subsidiaries' Losses (1,000) (3,000)
Change in Assets and Liabilities:
Increase in Other Assets --- (24,000)
Decrease in Accounts Payable and
Accrued Liabilities (2,000) (2,000)
----------- -----------
Net Cash Used in Operating Activities (33,000) (61,000)
----------- -----------
Net Decrease in Cash and Cash Equivalents (33,000) (61,000)
Cash and Cash Equivalents at Beginning
of Period 1,744,000 1,958,000
----------- -----------
Cash and Cash Equivalents at End
of Period $ 1,711,000 $ 1,897,000
=========== ===========
</TABLE>
See Accompanying Notes to Condensed Consolidated Financial Statements.
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BEVERLY HILLS BANCORP AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
MARCH 31, 1995
Note 1 - Condensed Consolidated Financial Statements:
The Condensed Consolidated Financial Statements included herein have
been prepared by Beverly Hills Bancorp (the "Company"), without audit, pursuant
to the rules and regulations of the Securities and Exchange Commission. Certain
information and footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have been
condensed or omitted pursuant to such rules and regulations, although the
Company believes the disclosures which are made are adequate to make the
information presented not misleading. Further, the Condensed Consolidated
Financial Statements have been prepared in accordance with generally accepted
accounting principles for interim financial information, the instructions to
Form 10-QSB and Regulation S-B (including Item 310(b) thereof) and reflect, in
the opinion of management, all adjustments necessary to present fairly the
financial position and results of operations as of and for the periods
indicated.
It is suggested that these Condensed Consolidated Financial Statements
be read in conjunction with the Consolidated Financial Statements and the Notes
thereto for the year ended December 31, 1994, included in the Beverly Hills
Bancorp Form 10-KSB Annual Report to the Securities and Exchange Commission.
Note 2 - Net Loss per Share:
Net loss per share is based on the weighted average number of common
shares outstanding during each period.
Note 3 - Notes Receivable - Sixty Eight Thousand, Inc.:
During March 1995, Sixty Eight Thousand, Inc. paid the Company the
interest due for the year ended December 31, 1994 and for the three months ended
March 31, 1995. These amounts, $38,500 and $9,625, respectively, have been
included in interest income for the three months ended March 31, 1995.
Additionally, the maturity date of these notes has been extended to December 31,
1995, and the Company received an escrow payment for interest from April 1, 1995
to December 31, 1995.
Note 4 - Income Taxes:
The Company files consolidated federal income and combined California
franchise tax returns on a cash basis. As of December 31, 1994, the Company has
net operating loss carryforwards of approximately $5,000,000 which are available
to offset future taxable income
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expiring from 1997 through 2009. Examination by taxing authorities of open tax
years could result in tax assessments and material changes to the net operating
loss carryforwards.
As a result of its reorganization, the Company is required to report
income for financial statement purposes as if no tax loss carryforward existed.
However, since the Company's tax status is not affected by the reorganization,
it is entitled to a reduction of federal income taxes, except for personal
holding taxes, arising from the utilization of its net operating losses incurred
prior to reorganization. Such reduction is credited to capital surplus, when
realized, rather than reflected in the income statement.
Federal statutes place significant restrictions on the utilization of
net operating loss deductions. Under present tax law, there is substantial risk
that net operating loss carryforwards will be reduced if certain conditions are
present in connection with an acquisition, merger or reorganization.
As of December 31, 1994, the deferred tax assets related to the net
operating loss carryforwards totaling approximately $2,000,000 have been fully
offset by valuation allowances, since the utilization of such amounts is
uncertain.
Note 5 - Sale of Tigera Shares and Plan of Complete Liquidation and Dissolution:
On January 23, 1995, the Company accepted an offer from Forschner
Enterprises, Inc. ("Forschner") to purchase from the Company 295,000 shares of
Tigera's common stock and all of the Company's holding of the capital stock of
TGI Acquisition Corp., a corporation wholly owned by the Company, which, in
turn, owns 4,445,000 shares of Tigera's common stock, for a total purchase of
4,740,000 shares of Tigera's common stock for $4,076,400. The transaction is
subject to the approval of the sale and a Plan of Complete Liquidation and
Dissolution by the Company's shareholders at a meeting to be held on June 1,
1995.
Should the sale and the Plan of Complete Liquidation and
Dissolution be approved, the Company estimates the net assets available for
distribution would approximate their recorded values, adjusted as follows:
<TABLE>
<S> <C>
Stockholders' Equity at December 31, 1994 $ 5,212,000
Estimated net loss for the period January 1 to May 31, 1995 (160,000)
------------
Stockholders' Equity at May 31, 1995 5,052,000)
Estimated gain on sale of Tigera shares 700,000
Remaining lease obligations (80,000)
Estimated costs of operation, liquidation and
dissolution (June 1, 1995 to final liquidation) (272,000)
------------
Estimated net assets available for distribution $ 5,400,000
============
Number of common shares outstanding 1,194,432
============
Estimated net assets per share $ 4.52
============
</TABLE>
Should the Plan of Complete Liquidation and Dissolution not be
approved, the Company will have to register as an Investment Company pursuant to
the Investment Company Act of 1940.
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Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
March 31, 1995
Results of Operations
Interest, dividend and other income was $66,000 for
the three months ended March 31, 1995, as compared to $48,000 for the three
months ended March 31, 1994. The increase is primarily due to the receipt of an
interest payment of $48,125 in 1995 from Sixty Eight Thousand, Inc. for the
interest due on the notes receivable for 1994 and the first quarter of 1995, as
compared to the receipt of an interest payment of approximately $32,000 in 1994
for the interest due on the notes receivable for 1993.
The equity in loss of investment and amortization of
excess cost of investment relate to the Company's purchase in December 1992 of
22.5% of the outstanding shares of Tigera Group, Inc. ("Tigera"). The principal
activity of Tigera consists of seeking and evaluating candidates for
acquisition. Tigera's net losses for the three months ended March 31, 1995 and
1994 were $46,000 and $61,000, respectively.
General and administrative expenses increased to
$97,000 for the three months ended March 31, 1995, from $83,000 for the three
months ended March 31, 1994. The increase is primarily attributable to increased
professional fees in connection with the proposed sale of the Tigera shares and
Plan of Complete Liquidation and Dissolution.
The Securities and Exchange Commission, by letter
dated June 29, 1993, raised the question of whether the Company "...may fall
within the definition of an investment company under Section 3(a)(1) and 3(a)(3)
of the Investment Company Act of 1940." After subsequent communication between
the staff of the Securities and Exchange Commission and the Company, special
counsel for the Company, in a letter dated December 6, 1993, informed the
Securities and Exchange Commission that if a "letter of intent" had not been
entered into within 90 days from the date thereof, the Company "...will take the
necessary steps promptly to effect a liquidation."
Though the Company was actively seeking a merger
candidate, at a meeting of the Board of Directors of the Company held on
February 11, 1994, a Committee of three directors was appointed to prepare a
report to be submitted to the Board at a meeting to be held on March 24, 1994,
"...detailing the manner and method to be used to liquidate the Company, with
specific recommendations with respect to each asset of the Company so as to
maximize shareholder value." On March 24, 1994 and April 28, 1994, the Company's
Board of Directors reviewed a report of the Committee and authorized the
Committee to continue to pursue its detailed recommendations with respect to
this matter.
On January 20, 1995, the Board of Directors called
for a Shareholders' meeting to approve, among other things, the sale by the
Company of its direct and indirect holdings of the common stock of Tigera Group,
Inc. ("Tigera") to Forschner Enterprises, Inc. for $4,076,400 and to adopt a
Plan of Complete Liquidation and Dissolution. The meeting is
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to be held on June 1, 1995. If the proposals are accepted and approved by
shareholders, the Company believes that the liquidation value of the Company's
assets would approximate their recorded value in the Company's consolidated
financial statements, other than the investment in Tigera, which would be sold
at a value in excess of its recorded value.
The Company files consolidated federal income and combined
California franchise tax returns on a cash basis. As of December 31, 1994, the
Company has net operating loss carryforwards of approximately $5,000,000 which
are available to offset future taxable income expiring from 1997 through 2009.
Examination by taxing authorities of open tax years could result in tax
assessments and material changes to the net operating loss carryforwards.
As a result of its reorganization, the Company is required to
report income for financial statement purposes as if no tax loss carryforward
existed. However, since the Company's tax status is not affected by the
reorganization, it is entitled to a reduction of federal income taxes, except
for personal holding taxes, arising from the utilization of its net operating
losses incurred prior to reorganization. Such reduction is credited to capital
surplus, when realized, rather than reflected in the income statement.
Federal statutes place significant restrictions on the
utilization of net operating loss deductions. Under present tax law, there is
substantial risk that net operating loss carryforwards will be reduced if
certain conditions are present in connection with an acquisition, merger or
reorganization.
Liquidity and Capital Resources
Cash and cash equivalents decreased to $1,711,000 as of March
31, 1995, compared with $1,744,000 as of December 31, 1994. The decrease is
attributable to expenditures for general and administrative expenses.
As of March 31, 1995, the Company's principal source of funds
consisted of $1,711,000 in cash and cash equivalents. Near-term capital
requirements for operating expenses and payment of liabilities are expected to
be financed through cash flow from interest income and existing cash balances.
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PART II. Other Information
Item 1. Legal Proceedings
None.
Item 2. Exhibits and Reports on Form 8-K
(a) Exhibits - None.
(b) Reports on Form 8-K: Form 8-K relating to
Item 2, Acquisition or Disposition of Assets,
was filed February 7, 1995, and is
incorporated herein by reference.
No other applicable items.
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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 thereunto duly authorized.
BEVERLY HILLS BANCORP
(Registrant)
By: /s/ Robert E. Kelly
---------------------------
Vice President,
Chief Financial Officer and
Principal Accounting Officer
Dated: April 27, 1995
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EXHIBIT INDEX
Exhibit 27 - Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> MAR-31-1995
<CASH> 1,711,000
<SECURITIES> 0
<RECEIVABLES> 450,000
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 5,733,000
<CURRENT-LIABILITIES> 98,000
<BONDS> 0
<COMMON> 1,434,000
0
0
<OTHER-SE> 3,694,000
<TOTAL-LIABILITY-AND-EQUITY> 5,733,000
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 141,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> (84,000)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (84,000)
<EPS-PRIMARY> 0
<EPS-DILUTED> (.07)
</TABLE>
