UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
( X ) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1995
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 1-8820
Banyan Short Term Income Trust
(Exact name of Registrant as specified in its charter)
Massachusetts 36-6801275
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
150 South Wacker Drive, Chicago, Illinois 60606
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (312) 553-9800
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 .
Shares of beneficial interest outstanding as of November 9, 1995: 6,667,410.
Transitional Small Business Disclosure Format. YES . NO X .
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
BANYAN SHORT TERM INCOME TRUST
CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 1995 AND DECEMBER 31, 1994
(UNAUDITED)
1995 1994
ASSETS
Cash and Cash Equivalents $ 3,607,333 $ 2,687,908
Investment Securities 24,231,039 4,638,553
Interest Receivable 116,228 64,556
Foreclosed Real Estate
Held for Sale --- 11,558,043
Net Investment in Real
Estate Ventures 1,538,283 4,229,540
Note Receivable --- 3,500,000
Other Assets 329,487 211,004
------------ ------------
Total Assets $ 29,822,370 $ 26,889,604
============ ============
LIABILITIES AND SHARE-
HOLDERS' EQUITY
Liabilities
Accounts Payable and
Accrued Expenses $ 502,325 $ 306,273
------------ ------------
Shareholders' Equity
Shares of Beneficial Interest,
No Par, 7,500,000 Shares
Authorized, 6,917,510 Shares
Issued 61,870,851 61,870,851
Accumulated Deficit (32,249,201) (34,881,537)
Unrealized Losses on
Investment Securities (20,242) (124,620)
Treasury Stock, at Cost,
for 250,100 Shares of
Beneficial Interest (281,363) (281,363)
------------ ------------
Total Shareholders' Equity 29,320,045 26,583,331
------------ ------------
Total Liabilities and
Shareholders' Equity $ 29,822,370 $ 26,889,604
============ ============
Book Value Per Share of
Beneficial Interest
(6,667,410 Shares Issued
and Outstanding) $ 4.40 $ 3.99
============ ============
The accompanying notes are an integral part of the
consolidated financial statements.
BANYAN SHORT TERM INCOME TRUST
CONSOLIDATED STATEMENTS OF INCOME AND EXPENSES
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1995 AND 1994
(UNAUDITED)
INCOME 1995 1994
Interest Income on Cash
and Cash Equivalents $ 202,517 $ 53,067
Interest Income on Investment
Securities 209,546 168,114
Other Interest Income 24,757 ---
----------- -----------
Total Income 436,820 221,181
----------- -----------
EXPENSES (RECOVERIES)
Shareholder Expenses 65,229 93,593
Directors' Fees, Expenses
and Insurance 165,124 155,895
Other Professional Fees 125,413 244,314
General and Administrative 458,174 254,663
Recovery of Losses On Loans
Notes, Interest Receivable
and Class Action Settlement
Costs and Expenses (336,374) (519,943)
------------ ------------
Total Expenses 477,566 228,522
----------- -----------
Operating Loss (40,746) (7,341)
Net Income From Real
Estate Ventures 356,971 1,522,223
Net Income From Foreclosed
Real Estate Held for Sale 2,316,111 ---
----------- -----------
Net Income $ 2,632,336 $ 1,514,882
=========== ===========
Net Income Per Share
of Beneficial Interest (Based
on Shares Outstanding of
6,667,410) $ 0.40 $ 0.23
=========== ===========
The accompanying notes are an integral part of the
consolidated financial statements.
BANYAN SHORT TERM INCOME TRUST
CONSOLIDATED STATEMENTS OF INCOME AND EXPENSES
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1995 AND 1994
(UNAUDITED)
INCOME 1995 1994
Interest Income on Cash
and Cash Equivalents $ 90,862 $ 14,412
Interest Income on Investment
Securities 73,352 60,699
----------- -----------
Total Income 164,214 75,111
----------- -----------
EXPENSES
Shareholder Expenses 5,971 24,246
Directors' Fees, Expenses
and Insurance 56,634 53,172
Other Professional Fees 41,948 105,680
General and Administrative 210,483 90,274
----------- -----------
Total Expenses 315,036 273,372
----------- -----------
Operating Loss (150,822) (198,261)
Net Income From Real Estate
Ventures 113,301 1,099,431
Net Income From Foreclosed Real
Estate Held for Sale 2,355,090 ---
----------- -----------
Net Income $ 2,317,569 $ 901,170
=========== ===========
Net Income Per Share
of Beneficial Interest (Based
on Shares Outstanding of
6,667,410) $ 0.35 $ 0.14
=========== ===========
The accompanying notes are an integral part of the
consolidated financial statements.
BANYAN SHORT TERM INCOME TRUST
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1995
(UNAUDITED)
Shares of Unrealized
Beneficial Interest Losses on
Investment
Shares Amount Securities
Shareholders'
Equity, December
31, 1994 6,917,510 $61,870,851 $ (124,620)
Net Income --- --- ---
Unrealized Gains
for the Period
Ended September
30, 1995 --- --- 104,378
--------- ----------- ----------
Shareholders'
Equity, September
30, 1995 6,917,510 $61,870,851 $ (20,242)
========= =========== ==========
BANYAN SHORT TERM INCOME TRUST
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1995 (CONTINUED)
(UNAUDITED)
Accumulated Treasury
Deficit Stock Total
Shareholders'
Equity December
31, 1994 $(34,881,537) $(281,363) $26,583,331
Net Income 2,632,336 --- 2,632,336
Unrealized Gains
for the Period
Ended September
30, 1995 --- --- 104,378
------------ --------- -----------
Shareholders'
Equity September
30, 1995 $(32,249,201) $(281,363) $29,320,045
============ ========= ===========
The accompanying notes are an integral part of the consolidated
financial statements.
BANYAN SHORT TERM INCOME TRUST
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1995 AND 1994
(UNAUDITED)
1995 1994
CASH FLOWS FROM OPERATING
ACTIVITIES:
NET INCOME $ 2,632,336 $1,514,882
Adjustments to Reconcile Net
Income to Net Cash Provided
by Operating Activities:
Amortization of Premium on
Investment Securities 3,401 30,079
Gain on Sale of Investment
Securities --- (3,238)
Gain on Sale of Foreclosed Real
Estate Held for Sale (2,336,957) ---
Equity in Net Income from
Real Estate Ventures (356,971) (1,489,820)
Net Change In:
Interest Receivable on Cash and
Cash Equivalents and
Investment Securities (51,672) (8,712)
Other Assets (118,483) (75,892)
Accounts Payable and Accrued
Expenses 196,052 (88,349)
----------- -----------
Net Cash Used In Operating
Activities (32,294) (121,050)
----------- -----------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Proceeds from Sale of Investment
Securities --- 703,238
Principal Payments on Investment
Securities 10,800,283 8,790,637
Purchase of Investment Securities (30,291,792) (12,382,243)
Proceeds from Sale of Foreclosed
Real Estate Held for Sale 13,895,000 ---
Collections of Notes Receivable 3,500,000 ---
Distributions from Real Estate
Ventures, Net 3,048,228 171,233
----------- -----------
Net Cash Provided By 951,719 (2,717,135)
Investing Activities ----------- -----------
Net Increase (Decrease) in Cash
and Cash Equivalents 919,425 (2,838,185)
Cash and Cash Equivalents at
Beginning of Period 2,687,908 5,237,003
----------- -----------
Cash and Cash Equivalents at
End of Period $ 3,607,333 $ 2,398,818
=========== ===========
The accompanying notes are an integral part of the
consolidated financial statements.
BANYAN SHORT TERM INCOME TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1995
(UNAUDITED)
Readers of this quarterly report should refer to Banyan Short Term
Income Trust's (the "Trust's") audited consolidated financial statements for
the year ended December 31, 1994, which are included in the Trust's 1994
Annual Report on Form 10-KSB, as certain footnote disclosures which would
substantially duplicate those contained in such audited financial statements
have been omitted from this report.
1. FINANCIAL STATEMENT PRESENTATION
The accompanying consolidated financial statements include the accounts
of the Trust, its wholly-owned subsidiaries, the Trust's 50% interest in the
Oakridge Joint Venture and 75% interest in the Dearborn Park Townhome
Partnership both of which are accounted for on the equity method. In the
opinion of management, all adjustments necessary for a fair presentation have
been made to the accompanying consolidated financial statements as of
September 30, 1995 and for the nine months and quarters ended September 30,
1995 and 1994. These adjustments made to the financial statements, as
presented, are all of a normal recurring nature to the Trust unless otherwise
indicated.
2. TRANSACTIONS WITH AFFILIATES
Administrative costs, primarily salaries and general and administrative
expenses are reimbursed by the Trust to Banyan Management Corp. ("BMC").
These costs are allocated to the Trust and other entities to which BMC
provides administrative services based upon the actual number of hours spent
by BMC personnel on matters related to the particular entity. The Trust's
allocated share of costs for the nine months ended September 30, 1995 and 1994
aggregated $286,315 and $214,413, respectively. As one of its administrative
services, BMC serves as the paying agent for general and administrative costs
of the Trust. As part of providing this payment service, BMC maintains a bank
account on behalf of the Trust. As of September 30, 1995, the Trust had a net
receivable due from BMC of $152,765. The net receivable is included in other
assets in the Trust's Consolidated Balance Sheet.
3. INVESTMENT SECURITIES
The Trust's investment securities portfolio at September 30, 1995 is as
follows:
AMORTIZED
COST NET OF ESTIMATED
PRINCIPAL MARKET
PAYDOWNS VALUE AT
TITLE OF EACH ISSUE RECEIVED SEPT. 30,
AND NAME OF ISSUER SEPT. 30, 1995 1995 (1)
Federal Home Loan Mortgage Corp. (2)
5.5% 7/6/95-10/15/1996 $ 769,758 $ 768,003
5.5% 7/06/95-3/15/2002 498,190 497,500
7.0% 7/11/95-1/15/2005 494,365 496,816
4.5% 9/29/95-7/25/2006 8,750,897 8,737,490
5.0% 7/06/95-1/25/2007 267,117 268,107
4.5% 7/06/95-3/15/2010 708,606 710,709
Federal National Mortgage Assoc. (2)
5.0% 7/06/95-8/25/1999 189,506 189,563
4.75% 9/08/95-2/25/2001 2,444,202 2,440,936
4.0% 7/06/95-10/25/2005 1,419,164 1,425,255
5.0% 7/06/95-1/25/2008 1,377,606 1,379,619
6.5% 9/11/95-4/25/2010 537,501 536,204
6.5% 7/06/95-7/25/2016 1,033,547 1,032,140
7.5% 9/28/95-9/25/2011 4,506,685 4,498,255
Merrill Lynch Trust
9.55% 8/31/95-8/01/2015 758,575 756,104
Collateralized Mortgage Securities
9.0% 9/15/95-6/25/2007 495,562 494,338
----------- -----------
$24,251,281 $24,231,039
=========== ===========
1. The Trust has recorded unrealized losses of $20,242 on its investment
securities based on their current market values at September 30, 1995.
2. The guaranteed REMIC Pass-Through Certificates are guaranteed as to
timely payment of principal and interest by the Federal National
Mortgage Association. The maturity of the principal of the above
investment securities is dependent upon the repayment of the underlying
U.S. Agency sponsored mortgages. The rate of repayment is dependent
upon the current market level of interest rates on mortgage loans as it
relates to the interest rates of the mortgages underlying each REMIC
security. The maturity of these investment securities, under the market
conditions as of the third quarter of 1995, is expected to be from
October 15, 1996 to September 25, 2011. These expectations may change
as interest rates on mortgage loans change.
4. FORECLOSED REAL ESTATE HELD FOR SALE, NOTE RECEIVABLE AND OTHER INCOME
The Trust had previously made three mortgage loans to the Boca Raton
Hotel and Club Limited Partnership (the "Borrower"). Those loans were cross
collateralized by the Boca Golf and Tennis Club and by a seven-acre
undeveloped parcel of land located near an existing marina adjacent to the
Boca Raton Hotel and Resort (the "Marina Parcel"). Both parcels are located
in Boca Raton, Florida. In March 1993, the Trust initiated foreclosure
proceedings against the Borrower, because of its three mortgage loans having
become due and no payment was forthcoming.
On December 29, 1994, the Court before which the foreclosure was pending
approved a Settlement Stipulation (the "Settlement Agreement") regarding the
Trust's foreclosure litigation related to the Trust's three mortgage loans to
the Borrower. Under the Settlement Agreement, the Trust received $1,000,000
in cash and a stipulated judgment providing for a foreclosure sale of the
Marina Parcel. The Settlement Agreement further provided that anytime prior
to March 31, 1995 the Borrower could obtain a release of the Trust's lien
against the Boca Golf and Tennis Club by tendering to the Trust the sum of
$3,500,000 plus interest at 10% per annum from the court approval date of the
Settlement Agreement. On February 7, 1995, a subsidiary of the Trust acquired
title to the Marina Parcel pursuant to the consensual foreclosure sale. On
February 22, 1995 the Trust received the aforesaid $3,500,000 plus $24,757 in
interest and released its mortgage lien on the Boca Golf and Tennis Club. For
the nine months ended September 30, 1995, the Trust recognized a net loss of
$20,846 related to the operation of the Marina Parcel.
On June 9, 1995 the Trust entered into a contract to sell its interest
in the Boca Marina Parcel to Boca Marina, Ltd. an unaffiliated third party for
a total purchase price of $14,000,000. On September 21, 1995 the Trust
completed the sale of the Property and, net of closing costs, received cash
proceeds of $13,895,000. The sale of the Property resulted in a gain on
disposition to the Trust of $2,336,957. The Trust has no further interest in
the Marina Parcel.
5. INVESTMENT IN REAL ESTATE VENTURES
Equity in Income:
For the nine months ended
September 30, 1995 1994
Dearborn Park Townhome
Partnership $ 515,331 $1,024,040
Oakridge Partnership (158,360) 498,183
---------- ----------
Total $ 356,971 $1,522,223
========== ==========
During the nine months ended September 30, 1995, the Trust received
$3,034,674 as its share of a distribution from the Dearborn Park Townhome
Partnership. Also during the nine months ended September 30, 1995, the Trust
contributed $196,539 to the Oakridge Partnership. These contributions were
offset by distributions of $210,093 related primarily to deposits received on
the sales contract on 211 acres of the Oakridge property.
6. RECOVERY OF LOSSES ON LOANS, NOTES AND INTEREST RECEIVABLE AND CLASS
ACTION SETTLEMENT COSTS AND EXPENSES
On February 9, 1995, the Trust received a cash distribution of $497,873
in respect of its interest in a liquidating trust established by VMS Realty
Partners for the benefit of the unsecured creditors of VMS Realty Partners and
its affiliates ("VMS"). A total of $336,374 of this distribution has been
treated as a recovery of losses on mortgage loans, notes and interest
receivable on its consolidated statement of income and expenses. The $336,374
net recovery in 1995 represents the $497,873 distribution received, net of an
estimated $161,499 due to the Class Action Settlement Fund representing the
Trust's share of amounts due pursuant to the terms of the previously settled
VMS securities litigation. As of September 30, 1995, the Trust has recorded
$279,808 in distributions received from the liquidating trust as a liability
in accounts payable and accrued expenses on its consolidated balance sheet as
required per the terms of the Class Action Settlement.
On January 25, 1994, the Trust received net proceeds of $519,943 by
terminating an escrow established as part of the Class Action Settlement of
the VMS securities litigation. The escrow was established to provide the
trustees and officers of the Trust with monies to fund the cost of any
litigation in which they might have been named as defendants following
settlement of the class action. Subsequently, the trustees have released the
proceeds from the escrow, and the Trust has purchased an insurance policy to
cover the officers and trustees.
7. OTHER INFORMATION
On October 26, 1995 the Trust's Board of Trustees adopted a plan to
terminate and liquidate the Trust (the "Plan"). The Plan, as adopted, will
not require the consent of the Trust's shareholders as it does not contemplate
the distribution of securities or other property in-kind to the shareholders.
Assuming the completion of the sale of the Trusts remaining assets by the end
of the second quarter of 1996, the Trust anticipates an aggregate distribution
to shareholders of $4.50 to $4.70 per share. The distribution may occur in
two or more installments.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
GENERAL
Banyan Short Term Income Trust (the "Trust") was formed to make short-
term loans to affiliates of VMS Realty Partners. These borrowers subsequently
defaulted on their obligations adversely affecting the Trust. As a result of
these defaults, the Trust suspended the making of new loans, except for
advances of additional funds under circumstances which it is deemed necessary
to preserve the value of existing collateral, including instances where the
Trust has foreclosed upon or taken title, directly or indirectly, to the
collateral. The Trust has also suspended distributions to shareholders. In
early 1990, the Trust implemented a plan designed to preserve its assets and
manage its properties acquired through foreclosure or otherwise until they can
be disposed of in an orderly manner (the "Principal Recovery Plan").
The Trust's most valuable asset, as of June 30, 1995, was a seven acre
parcel of undeveloped land located near an existing marina adjacent to the
Boca Raton Hotel and Resort (the "Boca Marina Parcel"). The Trust took title
to this property on February 7, 1995 by means of a consensual foreclosure. On
June 9, 1995, a subsidiary of the Trust entered into a contract to sell the
Boca Marina Parcel for a purchase price of $14,000,000. On September 21, 1995
the Trust completed the sale of the Boca Marina Parcel and received net cash
proceeds of $13,895,000. The Trust's other assets consist of a 50% interest
in a partnership (the "Oakridge Partnership") which owns in aggregate 211
acres of land located in Hollywood and Dania, Florida ("Oakridge"), a 75%
interest in the Dearborn Park Townhome Partnership ("Dearborn Park") which
owns the Federal Square at Dearborn Park townhome development in Chicago (the
"Federal Square Project"). The Trust's joint venture interests in these two
assets have a combined book value of $1,538,283 as of September 30, 1995. As
of September 30, 1995, the Trust also holds an interest in a liquidating trust
which is valued at zero. See discussions below for further details on the
Trust's interest in the liquidating trust.
During the remainder of 1995 and early 1996, it is the Trust's intention
to finish the development and sale of townhome units in the Federal Square
Project. The Trust also expects that the Oakridge Partnership will complete
the sale of the remaining residential parcels and retail site within the next
twelve months. The Trust will continue to concentrate its efforts toward
maximizing the value and marketability of its assets as well as continuing its
efforts to reduce the ongoing operating expenses of the Trust as it implements
its plan of liquidation.
As a result of the disposition of the Trust's assets and anticipated
sales efforts as discussed above, on August 17, 1995, the Trust announced that
its Board of Trustees, after analyzing the present status of the Trust's asset
base, authorized management to prepare a formal plan of
termination/liquidation. The Trustees determined that in view of the
anticipated sale of the Trust's remaining assets (Oakridge and Federal
Square), its modest capital base, and the lack of any suitable merger
candidates, the adoption of a formal plan of liquidation is the best strategy
to maximize shareholder value. On October 26, 1995 the Trust's Board of
Trustees adopted a plan to terminate and liquidate the Trust (the "Plan").
The Plan, as adopted, will not require the consent of the Trust's shareholders
as it does not contemplate the distribution of securities or other property
in-kind to the shareholders. In addition, on the same date, the Board of
Trustees approved the filing of a proxy for its previously postponed 1994
annual meeting which has been scheduled for January 15, 1996.
LIQUIDITY AND CAPITAL RESOURCES
Cash and cash equivalents consist of cash and short-term investments.
The Trust's cash and cash equivalents balance at September 30, 1995 and
December 31, 1994 was $3,607,333 and $2,687,908, respectively. In addition,
the Trust held investment securities at September 30, 1995 and December 31,
1994 of $24,231,039 and $4,638,553, respectively, which are immediately
convertible to cash. The $20,511,911 increase in cash and cash equivalents
and investment securities as of September 30, 1995 when compared to December
31, 1994 is primarily due to the Trust's receipt of $13,895,000 in cash
proceeds from the Trusts sale of its interest in the Boca Marina Parcel,
$3,500,000 from the settlement of the Boca Golf and Tennis Club Note, a
$497,873 distribution from the liquidating trust as discussed below,
$3,034,674 in distributions from the Dearborn Park Partnership and receipt of
distributions of $210,093 related primarily to deposits on the sales contract
on the Oakridge property as discussed below. These receipts were partially
offset by the Trust's payment of operating expenses and expenditures related
to its real estate ventures.
The Trust's current balance of cash and cash equivalents and investment
securities is expected to be sufficient to meet its reasonably anticipated
needs for liquidity and capital resources through its termination and
liquidation.
On February 9, 1995, the Trust received a cash distribution of $497,873
in respect of its interest in a liquidating trust established for the benefit
of the unsecured creditors of VMS Realty Partners and its affiliates ("VMS").
For the nine months ended September 30, 1995, the Trust has recorded $336,374
of this distribution as a recovery of losses on mortgage loans, notes and
interest receivable on its consolidated statement of income and expenses. The
$336,374 net recovery in 1995 represents the $497,873 distribution received
net of an estimated $161,499 due to the Class Action Settlement Fund
representing the Trust's share of amounts due as required per the terms of the
previously settled VMS securities litigation.
On June 9, 1995 a subsidiary of the Trust entered into a contract to
sell its interest in the Boca Marina Parcel to Boca Marina, Ltd. an
unaffiliated third party for a total purchase price of $14,000,000. On
September 21, 1995 the Trust completed the sale of the property and, net of
closing costs, received cash proceeds of $13,895,000. The sales price was
based upon consideration of a number of factors including market studies, sale
comparison and other internal valuations and considerations. The sale
resulted in a gain on disposition to the Trust of $2,336,957. The Trust has
no further interest in the Boca Marina Parcel.
On January 25, 1994, the Trust received net proceeds of $519,943
relating to a recovery of payments previously made into an escrow established
as part of the Class Action Settlement of the VMS securities litigation. The
escrow was established to provide the trustees and officers of the Trust with
monies to fund the cost of any litigation in which they may be named as
defendants following settlement of the class action. Subsequently, the
trustees have released the proceeds from the escrow, and the Trust has
purchased an insurance policy to cover the officers and trustees.
Management reviews each investment property interest held by the Trust
on a quarterly basis utilizing current market information, including
appraisals, market studies, financial projections and sales comparisons. When
it has been determined in management's opinion that a permanent impairment in
the value of a given property interest has occurred, the carrying value of
that interest is written down to its fair market value. Management has
determined that no write-down is required at this time.
The Trust's ability to make distributions to its shareholders is
dependent upon, among other things: (i) changes in eventual sales price of
and cash distributions derived from the Trust's investments in the Federal
Square Project and the Oakridge property; (ii) the Trust's ability to control
its expenses; and (iii) recovery on and potential distribution of cash
proceeds from the assets of the liquidating trust in which the Trust holds an
interest.
RESULTS OF OPERATIONS
For the nine months ended September 30, 1995 and 1994, the Trust
recorded total income of $436,820 and $221,181, respectively. For the
quarters ended September 30, 1995 and 1994 the Trust recorded total income of
$164,214 and $75,111, respectively. The increases for the nine months and
quarter ended September 30, 1995 when compared to the same periods in 1994 of
$215,639 and $89,103, respectively, are primarily due to increases in interest
earned on the investment of cash and cash equivalents and investment
securities which are attributable to the increase in cash available for
investment and higher interest rates available on cash and cash equivalents
and investment securities. Also contributing to the nine month increase is
the Trust's recognition of interest income in the amount of $24,757 from the
Boca Settlement Agreement as discussed above.
Net income from real estate ventures totalled $356,971 and $1,522,223
for the nine months ended September 30, 1995 and 1994, respectively, including
$515,331 and $1,024,040, respectively, from Dearborn Park. The Dearborn Park
income represents the Trust's 75% share of the Dearborn Park's net income from
the sale of 39 and 56 townhomes during the first nine months of 1995 and 1994,
respectively. Development of Dearborn Park's Federal Square Project,
consisting of a total of 117 townhomes, is substantially complete with 113
units sold or under contract as of November 1, 1995. During the first nine
months of 1995, Dearborn Park recorded net income of approximately $663,000 in
connection with the sale of the townhomes. The Trust also recorded $158,360
representing its share of the Oakridge Partnership operating loss for the nine
months ended September 30, 1995 as compared to $498,183 of net income for the
same period in 1994. The results during the same period of 1994 included a
non-recurring gain of $869,704 from the sale of 59 acres by the Oakridge
Partnership. For the quarters ended September 30, 1995 and 1994, net income
from real estate ventures in the aggregate totalled $113,301 and $1,099,431,
respectively. The Trust's Dearborn Park interest generated income for the
quarters ended September 30, 1995 and 1994 of $180,945 and $381,482 from the
sale of 15 and 17 townhomes, respectively. The Trust's share of the Oakridge
Partnership's operating loss for the quarter ended September 30, 1995 was
$67,644 compared to $717,949 of operating income for the same period in 1994.
The 1994 results were impacted by the $869,704 gain referred to above. On
September 21, 1995, the Trust completed the sale of the Boca Marina Parcel and
received net cash proceeds of $13,895,000. The sale of the Boca Marina Parcel
resulted in the Trust recognizing a gain on the sale of $2,336,957. See
Liquidity and Capital Resources for further details regarding the Boca Marina
Sale. The Trust has also recognized a net loss of $20,846 and $13,131 for the
nine months and quarters ended September 30, 1995, respectively, regarding the
Boca Marina Parcel.
Total expenses for the nine months ended September 30, 1995 and 1994
were $477,566 and $228,522, respectively. Primarily contributing to this
increase in expenditures is the increase of approximately $204,000 in general
and administrative expenses. General and administrative expenses increased
due primarily to an increase in Banyan Management Corp. ("BMC") expenses which
were allocated to the Trust. BMC expenses are based on the actual number of
hours spent by BMC personnel on Trust-related matters which for 1995 have
included finalizing the Boca Settlement Agreement, the foreclosure sale and
transfer of ownership of the Boca Marina Parcel, the sale of the Boca Marina
Parcel as well as the efforts expended related to the Trust's plan of
termination/liquidation. Expenses in 1994 were offset by the receipt of
$519,943 representing net proceeds from a recovery of payments previously made
into an escrow established as part of the class action settlement of the VMS
securities litigation. The 1994 recovery was partially matched in 1995 by a
$336,374 recovery of losses on mortgage loans, notes and interest receivable
which the Trust recorded during the quarter ended March 31, 1995. The 1995
recovery resulted from a distribution received in respect of the Trust's
interest in the liquidating trust discussed above. Also contributing to the
decrease in 1995 expenses are decreases in shareholder expenses, and other
professional fees for the nine months ended September 30, 1995, when compared
to the same period in 1994. Shareholder expenses decreased due to a decrease
in investor relation expenses, annual report preparation costs and due to the
timing of the recognition of payments for annual report and proxy related
costs. Other professional fees decreased as a result of reimbursements for
legal fees related to the Boca Settlement Agreement for expenditures made by
the Trust in prior periods.
Total expenses for the quarter ended September 30, 1995 and 1994 were
$315,036 and $273,372, respectively. Primarily contributing to this increase
for the quarter ended September 30, 1995 was a $120,209 increase in general
and administrative expenses due to additional BMC expenses allocated to the
Trust as discussed above. Partially offsetting the increased 1995 expenses,
other professional fees and shareholder expenses for the quarter ended
September 30, 1995 decreased by $63,732 and $18,275, respectively, due to the
reimbursement of fees related to the Boca Settlement Agreement and the effect
on investor relation costs and report costs as discussed above.
The combination of the above changes resulted in net income of
$2,632,336 ($0.40 per share) and $1,514,882 ($0.23 per share) for the nine
months ended September 30, 1995 and 1994, respectively. For the quarters
ended September 30, 1995 and 1994, the Trust recorded net income of $2,317,569
($0.35 per share) and $901,170 ($0.14 per share), respectively.
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) No exhibits are included with this report.
(b) The following report on Form 8-K was filed during the quarter ended
September 30, 1995 for which this report is filed:
A current report on Form 8-K was filed on August 31, 1995 wherein
Item 5. disclosed that the Board of Trustees of the Trust has
authorized management to prepare a formal plan of liquidation.
SIGNATURES
PURSUANT to the requirements of Section 13 or 15(d) 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.
BANYAN SHORT TERM INCOME TRUST
By: /s/ Leonard G. Levine Date: November 10, 1995
Leonard G. Levine, President
By: /s/ Joel L. Teglia Date: November 10, 1995
Joel L. Teglia, Vice President
of Finance and Administration, and Chief
Financial and Accounting Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
"This schedule contains summary financial information extracted from
Banyan Short Term Income Trust's Form 10QSB for the quarter ended
September 30, 1995 and is qualified in its entirety by reference to
such Form 10QSB."
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1995
<CASH> 3,607,333
<SECURITIES> 24,231,039
<RECEIVABLES> 116,228
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 27,954,600
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 29,822,370
<CURRENT-LIABILITIES> 502,325
<BONDS> 0
<COMMON> 29,601,408
0
0
<OTHER-SE> (281,363)
<TOTAL-LIABILITY-AND-EQUITY> 29,822,370
<SALES> 0
<TOTAL-REVENUES> 436,820
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 813,940
<LOSS-PROVISION> (336,374)
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 2,632,336
<INCOME-TAX> 0
<INCOME-CONTINUING> 2,632,336
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,632,336
<EPS-PRIMARY> 0.40
<EPS-DILUTED> 0.40
</TABLE>
