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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[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
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[ ] 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: 0-13917
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NUMERICA FINANCIAL CORPORATION
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(Exact Name of Registrant as specified in its charter)
NEW HAMPSHIRE 02-0386596
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(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification Number)
11 SPRING HILL ROAD
BEDFORD, NEW HAMPSHIRE 03310
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(Address of principal executive offices) (Zip Code)
(603) 472-3713
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(Registrant's telephone number, including area code)
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 .
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At March 31, 1995, 4,452,444 shares of $.10 par value common stock of the
Registrant were outstanding.
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NUMERICA FINANCIAL CORPORATION
INDEX
Page No.
PART I Item 1. Financial Statements (Unaudited)
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Balance Sheet-
March 31, 1995 and December 31, 1994...............3
Statement of Operations-
Three Months Ended March 31, 1995 and 1994.........4
Statement of Cash Flows-
Three Months Ended March 31, 1995 and 1994.........5
Notes to Unaudited Financial Statements............6
Item 2. Management's Discussion and Analysis
------- Analysis of Financial Condition and
Results of Operations..................9
PART II Other Information
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Item 1. Legal Proceedings......................10
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Items 2-6. Not Applicable.........................10
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Signatures.............................10
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<TABLE>
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NUMERICA FINANCIAL CORPORATION (PARENT COMPANY ONLY)
PART I FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)
BALANCE SHEETS (PARENT COMPANY ONLY)
(Dollars in Thousands)
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<CAPTION>
ASSETS
March 31, December 31,
1995 1994
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<S> <C> <C>
Cash and Cash Equivalents:
Demand and Cash $ -- $ 4
Interest-earning 93 111
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TOTAL CASH AND CASH EQUIVALENTS 93 115
TOTAL ASSETS 93 115
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LIABILITIES & SHAREHOLDERS' EQUITY
LIABILITIES
Other Liabilities 7 22
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TOTAL OTHER LIABILITIES 7 22
COMMITMENTS AND CONTINGENCIES
(Notes 1, 2 and 3)
SHAREHOLDERS' EQUITY:
Serial preferred stock, par value
$1.00 per share;
Authorized--2,000,000 shares; none
outstanding
Common stock, par value
$.10 per share;
Authorized--24,000,000 shares;
Issued and outstanding--
4,452,444 shares 445 445
Paid-in Capital 47,113 47,113
Accumulated Deficit (47,472) (47,465)
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86 93
TOTAL LIABILITIES & EQUITY $ 93 $ 115
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</TABLE>
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<TABLE>
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STATEMENT OF OPERATIONS (PARENT COMPANY ONLY) (UNAUDITED)
(Dollars in Thousands Except Per Share Data)
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<CAPTION>
Three Months Three Months
Ended Ended
March March
31, 1995 30, 1994
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<S> <C> <C>
INCOME
Interest Income $ 1 $ 1
Other Income - -
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TOTAL INCOME 1 1
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EXPENSES
Compensation - -
Litigation Settlements (Note 2) - -
Other Operating Expenses 8 6
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TOTAL EXPENSES 8 6
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INCOME (LOSS) BEFORE INCOME TAXES (7) (5)
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INCOME TAX REFUND - -
NET INCOME/(LOSS) (7) (5)
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Income (loss) per share $ (.0002) $ (.0001)
Weighted Average Shares
outstanding 4,452,444 4,452,444
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</TABLE>
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<TABLE>
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STATEMENT OF CASH FLOWS (PARENT COMPANY ONLY) (UNAUDITED)
(Dollars in Thousands)
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<CAPTION>
Three Months Three Months
Ended Ended
March March
30, 1995 30, 1994
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<S> <C> <C>
Cash Flows from Operating Activities:
Net Income (Loss) $ (7) $ (5)
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Adjustments to Reconcile Net Income
(Loss) to Net Cash Provided by
(Absorbed by) Operating Activities:
Increase or (Decrease) in:
Accrued Expenses and Other Liabilities (15) (19)
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Total Adjustments (15) (19)
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NET CASH PROVIDED BY (ABSORBED BY)
OPERATING ACTIVITIES (22) (24)
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Net Increase (or Decrease) in Cash
and Cash Equivalents (22) (24)
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD 115 196
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CASH AND CASH EQUIVALENTS, END OF PERIOD $ 93 $ 172
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</TABLE>
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NOTE 1. CORPORATE STATUS
BACKGROUND
Numerica Financial Corporation (the Parent "Company"), prior to
October 10, 1991, was a multi-bank savings and loan holding company and
owned all of the outstanding common stock of Numerica Savings Bank, FSB,
Laconia, New Hampshire ("Home"). Numerica and Home represented
substantially all of the gross revenues, expenses, assets and liabilities
of the Company. The Company had previously operated other subsidiaries,
however these subsidiaries were either liquidated or merged with Numerica
and Home such that as of September 30, 1991, the Company had no other
operating subsidiaries other than Numerica and Home.
REGULATORY ACTIONS
On October 10, 1991, various governmental banking agencies took
possession of eight financial institutions representing nearly 40% of New
Hampshire's banking assets. More specifically, effective that same date,
the OTS took possession of the assets, property and business of Numerica
and Home. The FDIC was appointed as the receiver for Numerica, while the
Resolution Trust Corporation ("RTC") was appointed the receiver for Home.
Certain assets, deposits and liabilities of Numerica and Dartmouth Bank and
New Hampshire Savings Bank, both of which were also placed in receivership
on October 10, were then transferred to New Dartmouth Bank. The receiver
for Home subsequently transferred certain assets, deposits and liabilities
of Home to Home Bank Federal Savings Association.
As a result, effective October 10, 1991, the Company lost control of
and authority over all of the assets and liabilities of Numerica and Home
including the disposition of the remaining assets and the resolution of any
claims against these entities. Since, at the date of regulatory
resolution, the recorded liabilities of Numerica and Home exceeded their
recorded assets, the Company does not expect to realize any value from its
investments in Numerica and Home. None of the Company's remaining assets
will be available for distribution to stockholders unless and until all of
the Company's creditors' claims, including certain matters presently in
litigation and/or potential claims, are satisfied. It is expected that
these remaining assets will be utilized to satisfy creditor and other
potential claims, defend and/or settle existing and potential litigation
and position the Company for legal dissolution. Based on the current
financial condition of the Company, as discussed in Management's Discussion
and Analysis of Financial Condition and Results of Operations included
elsewhere herein, it appears that any distribution to shareholders is
unlikely. Accordingly, the ability of the Company to continue as a going
concern is subject to significant uncertainty and substantial doubt.
Previous consolidated unaudited financial statements have not included
any adjustments relating to the recoverability of recorded asset amounts or
the amounts of liabilities that might be incurred should the Company,
Numerica or Home be unable to continue as a going concern(s). Because of
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the significance of the uncertainty concerning these matters, the Company
has been unable to obtain an opinion on the financial statements of the
Company and subsidiaries as of and for the years ended December 31, 1994,
1993, 1992 and 1991.
REGULATORY DEREGISTRATION BY OTS
As a result of the Regulatory Actions discussed above, the Company, by
operation of law, no longer was a savings and loan holding company.
Following these Regulatory Actions, the Company notified the OTS of this
fact and requested that the OTS formally acknowledge the deregistration of
the Company. The OTS, on September 9, 1992, notified the Company that it
was released from registration as a savings and loan holding company
(deregistered) as of September 3, 1992.
The Company, in connection with its formation and the acquisition of Home,
was requested by the OTS to stipulate to a Regulatory Capital Maintenance
Resolution. The Stipulation required, among other things, that the Company
provide sufficient capital to Numerica and Home to enable them to maintain
compliance with regulatory capital requirements during the time that the
Company controlled both entities. At the time that Numerica and Home were
placed into receivership by the OTS, neither institution was in compliance
with existing regulatory requirements and the Company did not have
sufficient financial resources to enable these entities to achieve
regulatory capital compliance. The Company has not received any formal
demands or claims against it from either the OTS, the FDIC or the RTC
associated with this Stipulation or the above described Regulatory Actions.
WINDING UP AND DISSOLUTION
As described above, the Company has no business operations, does not
expect to realize any value from its investments in Numerica and Home and
it is expected that any remaining assets will be utilized to satisfy
potential creditors and other potential claims, defend legal actions and
position the Company for legal dissolution and any distribution to
shareholders is unlikely. The Directors continue to seek to wind up the
Company's affairs in an orderly manner.
NOTE 2. LITIGATION
See prior 10-K and 10-Q filings.
REGULATORY UNCERTAINTIES
See Note 1 "CORPORATE STATUS", page 6 above
NOTE 3. CERTAIN SIGNIFICANT ACCOUNTING POLICIES
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PRINCIPLES OF CONSOLIDATION
The accompanying financial statements include the accounts of Numerica
Financial Corporation, the parent company only. Financial statements filed
pursuant to the Securities and Exchange Act of 1934, prior to September 30,
1991, were on a consolidated basis, reflecting the operations of the
Company and its subsidiaries, including Numerica and Home. However, given
the developments discussed in Note 1 above, the financial statements
included herein have been presented on a parent company only basis.
These financial statements have been prepared on a going concern
basis, which contemplates the realization of assets and satisfaction of
liabilities in the normal course of business. Accordingly, they do not
give effect to adjustments that would be necessary should the Company be
unable to continue as a going concern and thereby be exposed to realization
of its assets and satisfaction of its liabilities and commitments at
amounts different from those in the financial statements.
BASIS OF PRESENTATION-GOING CONCERN
Historically, the Company has not conducted substantial operations of
its own. Its primary purpose was to act as a holding company for and
provide certain consolidated services to its banking subsidiaries. As a
result of the regulatory resolution of these banking subsidiaries, the
Company has been left with a nominal net worth and no ongoing business
activity. Additionally, the outcome of certain potential and contingent
liabilities are unknown. No distribution of the Company's remaining assets
to stockholders will take place unless and until all of the Company's
creditors' claims, including certain matters presently in litigation and/or
potential claims, are satisfied. It is expected that remaining assets will
be utilized to satisfy creditor and other potential claims, defend and/or
settle existing and potential litigation and position the Company for legal
dissolution. Based on the current financial condition of the Company, any
distribution to shareholders is unlikely. Accordingly, the ability of the
Company to continue as a going concern is subject to significant
uncertainty and substantial doubt.
STATEMENT OF CASH FLOWS
For purposes of reporting cash flows, cash and cash equivalents
includes cash on hand, amounts due from banks and money market fund
deposits.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
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BACKGROUND
Please refer to "CORPORATE STATUS" discussion in Note 1 to Unaudited
Financial Statements on page 6. As a result of the regulatory actions
highlighted in the preceding paragraph, the Company lost control of and
authority over all of the assets and liabilities of Numerica and Home
including the disposition of the remaining assets and the resolution of any
claims against these entities. Since the recorded liabilities of Numerica
and Home exceeded their recorded assets at September 30, 1991, the Company
does not expect to realize any value from its investments in Numerica and
Home. None of the remaining assets of the Company nor the proceeds thereof
will be available for distribution to stockholders unless and until all of
the Company's creditors' claims, including certain matters presently in
litigation and/or potential claims, are satisfied. It is expected that
these remaining assets will be utilized to satisfy creditor and other
potential claims, defend and/or settle existing and potential litigation
and position the Company for legal dissolution. Based on the current
financial condition of the Company, as discussed below, it appears that any
distribution to shareholders in unlikely.
Financial Condition and Results of Operations
Please refer to the Balance Sheet and Statement of Operations on pages
3-4, above. The Company experienced a loss in the three month period ended
March 31, 1995 as a result of a lack of significant income, continued
expenses associated with the costs of preparing the Company for
dissolution. Management expects the Company to continue to be unprofitable
in future periods due to its limited financial resources, lack of
significant income, and the on-going costs associated with preparing the
Company for dissolution. Based on the current financial condition of the
Company, it appears that any distribution to shareholders is unlikely.
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Part II OTHER INFORMATION
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ITEM 1. LEGAL PROCEEDINGS
See "CORPORATE STATUS" in Note 1 to Financial Statements on page 6,
above. See also prior 10-K and 10-Q filings.
Items 2-6. Not Applicable.
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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 thereunto duly authorized.
NUMERICA FINANCIAL CORPORATION
May ___, 1995 By:/s/ John J. Reilly
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John J. Reilly
Chairman of the Board
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