|
|
|
|
|
|
|
|
|
|
|
|
|
|
Previous: CHUBB CORP, 10-Q, EX-27, 2000-08-11 |
Next: CHURCH LOANS & INVESTMENTS TRUST, 10QSB, EX-27, 2000-08-11 |
For the quarterly period ended June 30, 2000
OR
Commission File No. 0-8117
State of Organization - Texas
Internal Revenue Service — Employer Identification No. 75-6030254
5305 I-40 West
Amarillo, Texas 79106
Registrant’s telephone number: 806-358-3666
Check whether the issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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 ___
As of June 30, 2000, 7,000,806 shares of the Registrant’s shares of beneficial interest were outstanding.
Transitional Small Business Disclosure Format (check one) Yes ___ No X(A Real Estate Investment Trust)
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Balance Sheets (Unaudited)
June 30, 2000 and March 31, 2000
ASSETS
June 30, 2000 March 31, 2000
------------- --------------
CASH AND CASH EQUIVALENTS $ - $ 387,087
RECEIVABLES
Mortgage loans and church bonds - performing 23,561,265 22,141,873
Interim construction loans - performing 9,317,682 8,827,383
Nonperforming mortgage loans, church bonds and
interim construction loans 5,794,158 5,967,657
Less: Allowance for possible credit losses (1,433,172) (1,388,172)
------------- --------------
37,239,933 35,548,741
Accrued interest receivable 281,849 258,593
Notes receivable 900,546 599,969
------------- --------------
Total receivables 38,422,328 36,407,303
PROPERTY AND EQUIPMENT, net 162,357 166,275
REAL ESTATE ACQUIRED THROUGH FORECLOSURE 665,032 968,349
OTHER ASSETS 27,887 15,926
------------- --------------
TOTAL ASSETS $ 39,277,604 $ 37,944,940
============= ==============
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES
Bank overdraft $ 772,003 $ -
Notes payable and line of credit:
Related party 2,420,544 2,820,128
Other 14,029,373 12,043,064
------------- --------------
16,449,917 14,863,192
------------- --------------
Secured savings certificates 26,000 726,000
Accrued interest payable 70,951 108,320
Other 745,783 660,250
------------- --------------
Total liabilities 18,064,654 16,357,762
------------- --------------
SHAREHOLDERS' EQUITY
Shares of beneficial interest, no par value; authorized
shares unlimited, 7,007,402 shares issued 20,623,866 20,623,866
Undistributed net income 605,574 979,802
Treasury shares, at cost (6,596 shares) (16,490) (16,490)
------------- --------------
Total shareholders' equity 21,212,950 21,587,178
------------- --------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 39,277,604 $ 37,944,940
============= ==============
These condensed financial statements should be read only in connection
with the accompanying notes to condensed financial statements.
-1-
(A Real Estate Investment Trust)
Condensed Statements of Income (Unaudited)
Three-month periods ended June 30, 2000 and 1999
Three-month periods ended June 30,
2000 1999
---- ----
INTEREST INCOME AND FEES
Interest and fees on mortgage loans, church bonds
and interim construction loans $ 1,029,399 $ 1,613,225
Interest on temporary investments 15,926 5,348
-------------- ---------------
Total interest income and fees 1,045,325 1,618,573
-------------- ---------------
DEBT EXPENSE
Interest 327,590 245,529
Amortization of commissions paid to brokers 1,183 5,059
-------------- ---------------
Total debt expense 328,773 250,588
-------------- ---------------
Net interest income 716,552 1,367,985
PROVISION FOR POSSIBLE CREDIT LOSSES 45,000 45,000
-------------- ---------------
Net interest income less provision for
possible credit losses 671,552 1,322,985
-------------- ---------------
OTHER INCOME 103,280 2,656
OTHER OPERATING EXPENSES
General and administrative 154,460 158,533
Board of Trust Managers' fees 14,487 14,303
-------------- ---------------
Total other operating expenses 168,947 172,836
-------------- ---------------
Income before provision for income taxes 605,885 1,152,805
PROVISION FOR INCOME TAXES - -
-------------- ---------------
NET INCOME $ 605,885 $ 1,152,805
============== ===============
WEIGHTED AVERAGE NUMBER
OF SHARES OUTSTANDING 7,000,806 7,000,806
============== ===============
NET INCOME PER SHARE $.09 $.16
==== ====
DIVIDENDS PER SHARE $.14 $.10
==== ====
These condensed financial statements should be read only in connection
with the accompanying notes to condensed financial statements.
-2-
(A Real Estate Investment Trust)
Condensed Statements of Cash Flows (Unaudited)
Three month periods ended June 30, 2000 and 1999
Three-month periods ended June 30,
2000 1999
---- ----
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 605,885 $ 1,152,805
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 3,918 3,918
Amortization of debt expense 1,183 5,059
Amortization of loan discounts (8,707) (28,344)
Provision for possible credit losses 45,000 45,000
Gain on sale of other real estate (101,144) -
Changes in:
Accrued interest receivable (23,256) (102,442)
Accrued interest payable (37,369) (50,888)
Other liabilities 85,533 4,764
Other, net (23,820) (2,765)
-------------- ---------------
Net cash provided by operating activities 547,223 1,027,107
-------------- ---------------
CASH FLOWS FROM INVESTING ACTIVITIES
Investment in mortgage and interim construction
loans and church bonds (7,911,170) (5,391,356)
Payments received on mortgage and interim
construction loans and church bonds 6,183,686 5,689,907
Investments in notes receivable (410,242) (81,023)
Payments received on notes receivable 109,664 79,710
Proceeds from sale of other real estate 415,137 -
-------------- ---------------
Net cash provided (used) by investing activities (1,612,925) 297,238
-------------- ---------------
CASH FLOWS FROM FINANCING ACTIVITIES
Bank overdraft 772,003 -
Borrowings on notes payable 9,620,318 6,326,938
Principal payments on:
Secured savings certificates (700,000) (809,376)
Notes payable (8,033,593) (6,272,929)
Cash dividends (980,113) (700,081)
-------------- ---------------
Net cash provided (used) by financing activities 678,615 (1,455,448)
-------------- ---------------
Decrease in cash and cash equivalents (387,087) (131,103)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 387,087 181,068
-------------- ---------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ - $ 49,965
============== ===============
Supplemental disclosure of cash flow information
Cash paid during the period for interest $ 364,959 $ 296,417
============== ===============
These condensed financial statements should be read only in connection
with the accompanying notes to condensed financial statements.
-3-
(A Real Estate Investment Trust)
Notes to Condensed Financial Statements (Unaudited)
See Summary of Significant Accounting Policies in the Trust’s Annual Report on Form 10- KSB405 for a summary of the Trust’s significant accounting policies.
The unaudited condensed financial statements included herein were prepared from the books of the Trust in accordance with generally accepted accounting principles and reflect all adjustments (consisting of normal recurring accruals) which are, in the opinion of management, necessary to a fair statement of the results of operations and financial position for the interim periods. Such financial statements generally conform to the presentation reflected in the Trust’s Annual Report to Shareholders. The current interim period reported herein is included in the fiscal year subject to independent audit at the end of that year and is not necessarily an indication of the expected results for the fiscal year.
Weighted average interest rates and net interest rate margins at June 30, 2000 and 1999, were as follows:
Mortgage loan and Total Net interest
church bond portfolio indebtedness rate margin
--------------------- ------------ ------------
June 30, 2000 10.59% 8.50% 2.09%
June 30, 1999 9.82% 6.87% 2.95%
Scheduled principal payments on mortgage loans, church bonds and interim loans and indebtedness (including secured savings certificates and notes payable) outstanding at June 30, 2000, for the five twelve-month periods subsequent to June 30, 2000, follow:
Twelve-month period Mortgage loans, church bonds
ending June 30, and interim loans Indebtedness
------------------- ---------------------------- ------------
2001 $ 15,480,255 $ 16,475,917
2002 1,557,538 -
2003 1,623,805 -
2004 1,514,336 -
2005 1,538,807 -
-4-
(A Real Estate Investment Trust)
Notes to Condensed Financial Statements (Unaudited)
Mortgage loans, church bonds and interim construction loans on which the accrual of interest had been discontinued amounted to $5,794,158 and $2,754,509 at June 30, 2000 and 1999, respectively. If interest on these mortgage loans, church bonds and interim construction loans had been accrued as earned, interest and fees on loans in the accompanying condensed statements of income would have been increased by approximately $156,000 and $76,000 for the three-month periods ended June 30, 2000 and 1999, respectively. Interest income actually recognized during 2000 and 1999 was approximately $18,000 and $19,000, respectively.
Secured Savings Certificates (Certificates) are issued in amounts of $1,000 or more and have single maturity dates from 30 days to 10 years from date of issue. With respect to an individual Certificate, interest rate and frequency of payment of interest (either monthly, quarterly, semiannually, annually or at maturity) are fixed at the time of issuance of the Certificate. Effective July 1997, Church Loans discontinued the sale of Certificates.
Certificates are secured under the terms of an indenture that requires, among other things, the pledge of mortgage notes receivable with total unpaid principal amounts not less than 100% of the aggregate principal amount of Certificates outstanding.
This information is an integral part of the
accompanying condensed financial statements
-5-
(A Real Estate Investment Trust)
Item 2. Management’s Discussion and Analysis or Plan of Operation
Results of Operations - Three-Month Period Ended June 30, 2000 as Compared to the Three-Month Period Ended June 30, 1999:
The Trust’s revenues are derived from interest income earned on loans as well as, to a lesser degree, interest earned on church bonds and short-term investments. The decrease in the Trust’s revenues of $573,248 for the three-month period ended June 30, 2000, as compared to the corresponding period in 1999 is primarily due to the Trust receiving $1,380,493 in full and final payment of a loan owing to the Trust from St. Stephens Church of God in Christ, Inc. of San Diego, California. Such amount paid in full the principal, interest and attorney’s fees owing to the Trust by such Borrower on June 17, 1999. The loan had been accounted for as a nonperforming loan by the Trust and certain interest payments had been credited to principal. Therefore, the pay-off resulted in an additional recognition of interest income of approximately $611,000 during June 1999. At June 30, 2000 and 1999, performing loans and church bonds were approximately $32,879,000 and $34,046,000, respectively, and the average rate of return was 10.59% at June 30, 2000 and 9.82% at June 30, 1999.
The most significant expense item is interest expense which comprised the majority of total operating expense for each of the three-month periods ended June 30, 2000 and 1999. The increase of $82,061 in interest expense resulted from an increase in the average total amount of indebtedness outstanding during the three-month period ended June 30, 2000 as compared to the same period ended June 30, 1999 and an increase in the weighted average interest rate on all indebtedness from 6.87% at June 30, 1999 to 8.50% at June 30, 2000.
Other income was $103,280 for the three months ended June 30, 2000 and was greater than the $2,656 for the same period in 1999, primarily due to the gain on sale of other real estate of $101,144.
-6-
(A Real Estate Investment Trust)
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K:
(a) Exhibits: None.
(b) Reports on Form 8-K: None
-7-
(A Real Estate Investment Trust)
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant has caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| By |
/s/ B. R. McMorries ______________________________ B. R. McMorries, Chairman |
Dated: 8/14/2000 |
| By |
/s/ Kelly Archer ______________________________ Kelly Archer Chief Financial Officer |
Dated: 8/14/2000 |
8
|
|