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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) February 14, 1997
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FIRST CENTRAL FINANCIAL CORPORATION
(Exact Name of Registrant as Specified in Charter)
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NEW YORK 1-9138 11-2648222
(State or Other Jurisdiction of (Commission File Number) (I.R.S. Employer Identification Number)
Incorporation)
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266 MERRICK ROAD
LYNBROOK, NEW YORK 11563
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (516) 593-7070
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ITEM 5. OTHER EVENTS
Pursuant to Paragraph F of the General Instructions to Form 8-K, the
Company hereby incorporates by reference herein the press release issued by the
Company on February 14, 1997, which is attached hereto as Exhibit 99.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(C) EXHIBITS
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Exhibit Description
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99 Press release, dated February 14, 1997
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SIGNATURES
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 hereunto duly authorized.
FIRST CENTRAL FINANCIAL CORPORATION
February 20, 1997 By: /s/ Andrew W. Attivissimo
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Andrew W. Attivissimo
President
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INDEX TO EXHIBITS
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Exhibit Description
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99 Press release, dated February 14, 1997
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EXHIBIT 99
PRESS RELEASE
FIRST CENTRAL FINANCIAL CORPORATION
FOR RELEASE: FEBRUARY 14, 1997
CONTACT: VINCENT ESPOSITO, CONTROLLER
FIRST CENTRAL FINANCIAL CORPORATION
266 MERRICK RD.
LYNBROOK, NY 11563
(516) 593-7070
LYNBROOK, NY - February 14, 1997 - First Central Financial Corporation (ASE-FCC)
announced today certain preliminary and unaudited results for the period ended
December 31, 1996. First Central expects to incur a charge to earnings estimated
at $11.5 million for the quarter ended December 31, 1996 for the purpose of
increasing the loss reserves of First Central's principal subsidiary, First
Central Insurance Company, a property and casualty insurer. Primarily as a
result of the charge to earnings, First Central expects to report a net loss for
the year ended December 31, 1996 of $9.7 million (after tax benefits) or
approximately $1.62 per share. The foregoing estimates are preliminary and
unaudited and subject to adjustment upon completion of First Central's audit by
First Central's independent public accountants and as a result of the New York
State Insurance Department review referred to below. Based on such estimates,
First Central anticipates that Shareholders' Equity at December 31, 1996 will
decline to approximately $23.2 million from $33.3 million at December 31, 1995
and Statutory Surplus of First Central Insurance Company at December 31, 1996 is
expected to decline to approximately $10.5 million. Based upon required
relationships between Net Premiums Written and Statutory Surplus, First Central
Insurance Company expects that the reduction in Statutory Surplus will result in
significantly reduced premium volume for the foreseeable future.
In addition, First Central Insurance Company will have a deficiency in Earned
Surplus resulting from its operational losses. Accordingly, it will be precluded
from paying dividends to First Central by reason of such deficiency. Since the
only material source of income to First Central is dividends from First Central
Insurance Company, First Central will not declare any further dividends on its
common stock for the foreseeable future, and unless First Central obtains
another source of funds, First Central will be unable to pay the August 1, 1997
interest of $220,500 and the August 1, 1997 sinking fund obligation of $1.8
million under its 9% Convertible Subordinated Debentures. First Central is not
currently in default under such Debentures but failure to pay the August 1, 1997
interest and sinking fund obligations will constitute defaults under the
Debentures entitling the holders to accelerate the entire outstanding amount,
currently $4.9 million.
First Central emphasized that the foregoing anticipated results are preliminary
and may be subject to further adjustments resulting in additional charges to
earnings, higher losses and lower
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surplus than set forth above. Among other things, in connection with its
triennial audit, First Central Insurance Company is in discussions with the New
York State Insurance Department concerning its reserves and receivables at
December 31, 1995. If the Insurance Department requires additional charges to
earnings in accordance with its preliminary determinations, higher net losses
and lower Shareholders' Equity and Statutory Surplus than set forth above will
be reported at December 31, 1996. First Central Insurance Company believes that
the Insurance Department may request that the Insurance Company submit a plan
demonstrating to the Insurance Department the manner in which the Insurance
Company proposes to restore the Insurance Company to compliance with Insurance
Department requirements. There can be no assurance as to the outcome of the
Insurance Company's discussions with the Insurance Department and the result of
the Insurance Department's review.
First Central anticipates that its Annual Report on Form 10-K will be timely
filed and hence available on or before March 31, 1997.
In an unrelated development, First Central announced that Martin J. Simon, who
recently turned 77, has resigned as Chairman and Chief Executive Officer. Mr.
Simon, First Central's founder and largest shareholder (owner of approximately
20% of the outstanding stock), has been engaged as a consultant and will remain
on the Board of Directors.
Mr. Simon stated "First Central has engaged a capable new President to lead it
into the future. I intend to assist First Central in the challenges ahead. I
have also decided to begin a new chapter in my life. I intend to teach and
lecture as well as assist First Central."
Andrew W. Attivissimo, President and Chief Operating Officer has been named Mr.
Simon's successor as Chairman and Chief Executive Officer. Mr. Attivissimo, who
has over 36 years of experience in the insurance industry, was hired by First
Central in October 1996 and is implementing First Central's plans to review and
consolidate its business.
