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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q/A
AMENDED QUARTERLY REPORT
________________
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 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 2-94289
PRESIDENTIAL MORTGAGE COMPANY
(Exact name of Registrant as specified in its charter)
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California 95-3611304
(State or other jurisdiction of incorporation or organization) (IRS Employer Identification Number)
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21031 Ventura Boulevard
Woodland Hills, California 91364
(Address of Principal Executive Office) (Zip Code)
Registrant's telephone number, including area code (818) 992-8999
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 NO X
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
FINANCIAL CONDITION
Total consolidated assets of Presidential Mortgage Company (referred
to herein as the "Company" with respect to consolidated information, and as
"Presidential" with respect to the unconsolidated operations of Presidential
Mortgage Company) decreased $2.0 million (1.9%) to $101.7 million at March 31,
1995 from $103.7 million at December 31, 1994. The decrease resulted primarily
from declines in cash and cash equivalents, loans receivable, excess yield
receivable, and interest receivable, offset by an increase in accounts
receivable. Loans receivable decreased by $5.8 million (8.9%), to $59.3
million from $65.1 million, as a result of loan pay offs and loan sales. Cash
and cash equivalents decreased by $1.3 million (6.9%), to $18.3 million from
$19.6 million. Interest receivable declined by $.5 million (41.9%), to $.6
million from $1.1 million, primarily due to the reduction of the loan
portfolio. Accounts receivable increased by $6.2 million (111.8%), primarily
due to $6.1 million of loans originated for sale which were sold in March, for
which payment was not received until April 1995. In addition, accounts
receivable reflect an asset valued by management at $.8 million, representing
the present value of an annual servicing released fee payable to Pacific Thrift
and Loan Company ("Pacific Thrift"), the Company's primary operating
subsidiary, by the purchaser of certain loans originated for sale. See the
Company's Annual Report on Form 10-K for the year ended December 31, 1994,
Item 1. "Business -- Lending Activities -- Loans Originated for Sale."
Total liabilities decreased $2.3 million (2.4%) to $91.1 at March 31,
1995 from $93.3 at December 31, 1994. The decrease resulted primarily from
declines in notes payable, thrift certificates payable and mortgages payable on
OREO. Notes payable decreased by $1.0 million (6.5%), to $13.8 million from
$14.8 million, due to pay down of the bank debt. Thrift certificates decreased
by $.5 million (.7%) to $69.0 million from $69.5 million. Mortgages payable on
OREO decreased by $.5 million (22.1%), to $1.8 million from $2.3 million.
Total partnership capital increased by $.2 million (2.0%) to $10.6
million from $10.4 million, due to net income of $.2 million earned during the
quarter ended March 31, 1995.
RESULTS OF OPERATIONS
The Company incurred a net operating loss of $.2 million for the
quarter ended March 31, 1995, compared with a net operating loss of $1.0
million for the quarter ended March 31, 1994. However, due to the recognition
of a $.4 million tax benefit from Pacific Thrift's operating loss carryforward,
net income after taxes was $.2 million. The reduction in the net operating
loss in the first quarter of 1995 was due primarily to an increase in total
interest income. Total interest income decreased by $.3 million (10.4%),
due to a reduction of $.5 million (16.2%) in interest and fees on loans
receivable. Total interest expense increased by $.2 million (18.6%) to
$1.4 million from $1.2 million, due to increased rates paid by Pacific Thrift
on thrift certificates under $100,000. Net interest income for the quarter
ended March 31, 1995 compared with the same quarter of the prior year decreased
by $.5 million (30.2%), and by $.8 million (49.7%) after provision for loan
losses.
Noninterest income increased by $1.5 million (128%) to $2.6 million
from $1.1 million, primarily as a result of a $1.5 million increase in
gains on sale of loans and a $.1 million decrease in trustee and reconveyance
fees. Noninterest expense decreased by $.1 million (2.5%) to $3.6 million
from $3.7 million, primarily as a result of a $.2 million reduction in
expenses on OREO and a $.1 million reduction in general and administrative
expense, partially offset by a net loss on sales of OREO of less than
$.1 million.
PROVISION FOR LOAN LOSSES
The provision for loan losses was $.4 million for the first quarter of
1995, compared with $.2 million for the first quarter of 1994. The total
allowance for loan losses was $3.9 million at March 31, 1995 compared with $4.3
million at December 31, 1994, reflecting sales and payoffs of loans as to which
reserves had previously been taken and improvements in status in some portfolio
loans. Included in loan sales were $2 million in Title I loans, as to which
Pacific Thrift had previously reserved $.2 million.
LIQUIDITY AND CAPITAL RESOURCES
The primary source of the Company's liquidity is the cash and cash
equivalents maintained by Pacific Thrift in connection with its deposit-taking
and lending activities. At March 31, 1995, cash and cash equivalent assets
totalled $18.3 million, compared with $19.6 million at December 31, 1994.
Presidential does not maintain significant cash and cash equivalent assets on
its own behalf, and uses substantially all of its cash flow to pay down the
bank debt on a monthly basis.
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PRESIDENTIAL MORTGAGE COMPANY
(A California Limited Partnership)
AND SUBSIDIARIES
Consolidated Statements of Income
Unaudited
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THREE MONTHS ENDED
March 31, March 31,
1995 1994
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Interest Income:
Interest and fees on loans receivable 2,386,000 2,848,000
Interest on investments 226,000 67,000
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Total interest income 2,612,000 2,915,000
Interest Expense:
Interest on thrift certificates greater than $100,000 4,000 14,000
Interest on other thrift certificates 976,000 661,000
Interest on notes payable 425,000 510,000
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Total interest expense 1,405,000 1,185,000
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Net interest income 1,207,000 1,730,000
Provision for loan losses 446,000 217,000
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Net interest income afer provision for loan losses 761,000 1,513,000
Noninterest income:
Trustee and reconveyance fees 785,000 877,000
Other income 308,000 266,000
Gain on sale of Title I loans 1,515,000 0
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2,608,000 1,143,000
Noninterest expense:
General and administrative 1,413,000 1,511,000
Salaries, employee benefits and personnel services 1,797,000 1,759,000
Amortization of organization costs 28,000 13,000
Depreciation and amortization 116,000 135,000
Expenses on real estate acquired in settlement of loans 161,000 348,000
Net (gain)loss on sales of real estate acquired
in settlement of loans 77,000 (82,000)
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3,592,000 3,684,000
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Net income before tax provision (223,000) (1,028,000)
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Tax Provision (430,000) 0
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Net income 207,000 (1,028,000)
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See accompanying Notes to Consolidated Financial Statements and Management's
discussion and Analysis of Financial Condition and Results of Operations.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Company has duly caused this Amended Report to be signed on its
behalf by the undersigned, thereunto duly authorized.
PRESIDENTIAL MORTGAGE COMPANY
(Registrant)
November 29, 1995 JOEL R. SCHULTZ
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Joel R. Schultz,
Chief Managing Officer of Registrant;
President of Presidential Services
Corporation ("PSC"), general partner
of Presidential Management Company, a
California limited partnership,
general partner of the Registrant
November 29, 1995 CHARLES J. SIEGEL
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Charles J. Siegel,
Chief Financial and Accounting Officer
of the Registrant
