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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q/A
AMENDED QUARTERLY REPORT
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/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 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
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Commission file number 2-94289
PRESIDENTIAL MORTGAGE COMPANY
(Exact name of Registrant as specified in its charter)
California 95-3611304
(State or other jurisdiction of (IRS Employer Identification Number)
incorporation or organization)
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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PRESIDENTIAL MORTGAGE COMPANY
(A California Limited Partnership)
AND SUBSIDIARIES
Consolidated Statements of Income
Unaudited
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
June 30, June 30, June 30, June 30,
1995 1994 1995 1994
<S> <C> <C> <C> <C>
Interest Income:
Interest and fees on loans receivable 2,191,000 2,835,000 4,577,000 5,682,000
Interest on deposits with banks 233,000 65,000 459,000 131,000
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Total interest income 2,424,000 2,900,000 5,036,000 5,813,000
Interest Expense:
Interest on thrift certificates greater than $100,000 2,000 5,000 6,000 19,000
Interest on other thrift certificates 1,045,000 663,000 2,021,000 1,324,000
Interest on notes payable 379,000 532,000 804,000 1,042,000
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Total interest expense 1,426,000 1,200,000 2,831,000 2,385,000
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Net interest income 998,000 1,700,000 2,205,000 3,428,000
Provision for loan losses 554,000 468,000 1,000,000 685,000
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Net interest income after provision for loan losses 444,000 1,232,000 1,205,000 2,743,000
Noninterest income:
Trustee and reconveyance fees 738,000 813,000 1,523,000 1,690,000
Other income 285,000 278,000 593,000 546,000
Gain on sale of loans 1,818,000 614,000 3,333,000 614,000
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2,841,000 1,705,000 5,449,000 2,050,000
Noninterest expense:
General and administrative 1,729,000 1,807,000 3,142,000 3,317,000
Salaries, employee benefits and personnel services 1,895,000 1,983,000 3,692,000 3,742,000
Amortization of organization costs 45,000 25,000 73,000 39,000
Depreciation and amortization 123,000 136,000 239,000 271,000
Expenses on real estate acquired in settlement of loans (136,000) 588,000 25,000 935,000
Net loss (gain) on sales of real estate acquired
in settlement of loans 249,000 199,000 326,000 117,000
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3,905,000 4,738,000 7,497,000 8,421,000
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Net income before tax provision (620,000) (1,801,000) (843,000) (2,828,000)
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Tax Provision (84,000) 0 (514,000) 0
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Net income after tax provision (536,000) (1,801,000) (329,000) (2,828,000)
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</TABLE>
See accompanying Notes to Consolidated Financial Statements and
Management's Discussion and Analysis of Financial Condition and
Results of Operations.
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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 $11.5 million (11.1%) to $92.2 million at June 30,
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, real estate acquired in settlement of loans ("OREO") and interest
receivable, offset by increases in accounts receivable and excess yield
receivable. Loans receivable decreased by $9.3 million (14.3%), to $55.7
million from $65.1 million, as a result of loan pay offs and loan sales.
Cash and cash equivalents decreased by $5.8 million (29.5%), to $13.8 million
from $19.6 million. However, this decline in cash and cash equivalents was
offset by a $4.8 million (87.3%) increase in accounts receivable, to $10.4
million at June 30, 1995 from $5.5 million at December 31, 1994. Accounts
receivable reflected $6.4 million due for loans sold as of June 30, 1995,
for which payment was not received until July 1995. Excess yield receivable
increased $.9 million, to $1.8 million from $.9 million, reflecting primarily
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." OREO
declined by $2.3 million (30.6%), to $5.3 million at June 30, 1995 from
$7.6 million at December 31, 1994, reflecting sales of OREO. Interest
receivable declined by $.6 million (50.3%), to $.5 million from $1.1 million,
primarily due to the reduction of the loan portfolio.
Total liabilities decreased $11.2 million (12.0%) to $82.1 million at
June 30, 1995 from $93.3 at December 31, 1994. The decrease resulted from
declines in notes payable, thrift certificates payable, accounts payable,
accrued expenses and interest payable and mortgages payable on OREO. Notes
payable decreased by $4.8 million (32.4%), to $10.0 million from $14.8 million,
due to pay down of the bank debt. Thrift certificates payable decreased by $4.8
million (6.8%) to $64.7 million from $69.5 million, reflecting the reduction in
total assets of Pacific Thrift. Accounts payable, accrued expenses and interest
payable decreased by $.7 million (11.9%), to $4.9 million from $5.6 million at
December 31, 1994, primarily due to a $.4 million reduction in accrued expenses
for the environmental remediation of OREO acquired by Pacific Thrift after
receiving a lower bid for completion of the work. Mortgages payable on OREO
decreased by $1.0 million (43.2%), to $1.3 million from $2.3 million, due to
sale of OREO.
Total partnership capital decreased by $.3 million (3.2%) to $10.1
million from $10.4 million, due to net losses of $.3 million incurred during the
six months ended June 30, 1995.
RESULTS OF OPERATIONS
The Company incurred a net operating loss of $.6 million for the
quarter ended June 30, 1995, compared with a net operating loss of $1.8 million
for the quarter ended June 30, 1994. Net operating losses for the six months
ended June 30, 1995 were $.8 million, compared with $2.8 million for the six
months ended June 30, 1994. However, due to the recognition of tax benefits
from Pacific Thrift's operating loss carryforward equal to $.1 million for the
second quarter and $.5 million for the six months ended June 30, 1995, net
losses after taxes were $.5 million for the quarter ended June 30, 1995 and $.3
million for the six months ended June 30, 1995.
The reduction in the net operating loss in the first and second
quarters of 1995 was due primarily to increases in noninterest income and
decreases in noninterest expenses from the first and second quarters of 1994.
Total interest income decreased by $.5 million (16.4%) for the quarter and
$.8 million (13.4%) for the six months ended June 30, 1995, from the same
periods of 1994. Total interest expense increased by $.2 million (18.8%) for
the quarter and $.4 million (18.7%) for the six months ended June 30, 1995
from the same periods of 1994, due to higher interest rates paid on thrift
certificates by Pacific Thrift. Net interest income before provision for loan
losses decreased by $.7 million (41.3%) for the quarter and $1.2 million
(35.7%) for the six months ended June 30, 1995, from the same periods of 1994.
Net interest income after provision for loan losses decreased by $.8 million
(64.0%) for the quarter and $1.5 million (56.1%) for the six months ended
June 30, 1995, from the same periods of 1994.
Noninterest income increased by $1.1 million (66.6%) for the
quarter and by $2.6 million (91.2%) for the six months ended June 30, 1995,
primarily as a result of increases in gain on sale of loans, partially offset
by decreases in trustee and reconveyance fees. Gains on sale of loans
increased by $1.2 million (196.1%) for the quarter and $2.7 million (442.8%)
for the six months ended June 30, 1995. Noninterest expense decreased by
$.8 million (17.6%) for the quarter and $.9 million (11.0%) for the six months
ended June 30, 1995. Reductions in noninterest expense were primarily due to
reductions in general and administrative expenses, salaries, employee benefits
and personnel services, and expenses on OREO. General and administrative
expenses declined by $.1 million (4.3%) for the quarter and $.2 million (5.3%)
for the six months ended June 30, 1995 from the same periods of 1994.
Salaries, employee benefits and personnel services decreased by $.1 million
(4.4%) for the quarter and $.05 million (1.3%) for the six months ended
June 30, 1995 from the same periods of 1994. Expenses on OREO decreased by
$.7 million (123%) for the quarter and $.9 million (97.3%) for the six months
ended June 30, 1995 compared with the same periods of 1994. Offsetting these
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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
