<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
__________
FORM 10-Q
(Mark One)
__
| X | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
__ EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 1994
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 33-8195
NORTH SIDE CAPITAL CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 22-2920600
- - - - --------------------------------------- -----------------------
(State or other jurisdiction) (I.R.S. employer
of incorporation or organization) identification no.)
1105 North Market St., Suite 300, Wilmington, DE 19899
- - - - -------------------------------------------------- -------------
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code (302)427-8736
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 _______
Registrant had 1,000 shares of common stock outstanding (wholly-owned
by North Side Savings Bank as of February 1, 1995).
THE REGISTRANT MEETS THE CONDITION FOR AND IS, THEREFORE, UTILIZING
THE REDUCED DISCLOSURE FORMAT PROVIDED BY GENERAL INSTRUCTION H(1)(a) AND (b)
OF FORM 10-Q.
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INDEX
NORTH SIDE CAPITAL CORPORATION
Cover
Index Page
- - - - ----- ----
PART I
Item 1. - Financial Statements F-1 to F-6
Item 2. - Management's Discussion and
Analysis of Financial Condition
and Results of Operations F-7
PART II
Item 1. - Legal Proceedings 1
Item 2. - Changes in Securities 1
Item 3. - Defaults Upon Senior Securities 1
Item 4. - Submission of Matters to a Vote of
Security Holders 1
Item 5. - Other Information 1
Item 6. - Exhibits and Reports on Form 8-K 1
<PAGE> 3
F-1
PART I - FINANCIAL INFORMATION
Item 1. - Financial Statements
NORTH SIDE CAPITAL CORPORATION
INDEX TO FINANCIAL STATEMENTS
Financial Statements
- - - - --------------------
Balance Sheets as of December 31, 1994
and September 30, 1994 F-2
Statements of Income and Accumulated Deficit
for the Three Months Ended
December 31, 1994 and 1993 F-3
Statements of Cash Flows for the
Three Months Ended
December 31, 1994 and 1993 F-4
Notes to Financial Statements F-5 to F-6
In the opinion of management, the accompanying unaudited Financial Statements
include all normal recurring adjustments necessary for a fair presentation of
the Corporation's financial condition and results of operations in accordance
with generally accepted accounting principles.
<PAGE> 4
NORTH SIDE CAPITAL CORPORATION
BALANCE SHEETS
DECEMBER 31, 1994 AND SEPTEMBER 30, 1994
(UNAUDITED)
<TABLE>
<CAPTION>
LIABILITIES AND
DECEMBER 31, SEPTEMBER 30, STOCKHOLDER'S DECEMBER 31, SEPTEMBER 30,
ASSETS 1994 1994 EQUITY (DEFICIT) 1994 1994
- - - - ------ ----------- ----------- ----------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Current Assets Current Liabilities
- - - - -------------- -------------------
CASH $ 627,155 $ 598,103 ACCOUNTS PAYABLE $ 22,381 $ 24,094
INTEREST RECEIVABLE 155,967 163,630 INTEREST PAYABLE 304,669 324,052
OTHER ASSETS 14,973 16,484 ---------- -----------
----------- ----------- TOTAL CURRENT LIABILITIES 327,050 348,146
TOTAL CURRENT ASSETS 798,095 778,217
COLLATERALIZED MORTGAGE
INVESTMENT IN GNMA OBLIGATIONS, SERIES 1
MORTGAGE-BACKED (INCLUDING PREMIUM OF
SECURITIES, AT COST 16,210,407 17,524,910 $62,962 AND $74,962) 16,761,022 18,047,485
DEFERRED COSTS 52,637 62,637 Stockholder's Equity (Deficit)
COMMON STOCK, $1 PAR VALUE:
1,000 SHARES AUTHORIZED,
ISSUED AND OUTSTANDING 1,000 1,000
ACCUMULATED DEFICIT (27,933) (30,867)
---------- -----------
TOTAL STOCKHOLDER'S
EQUITY (DEFICIT) (26,933) (29,867)
----------- ----------- ---------- -----------
$17,061,139 $18,365,764 $17,061,139 $18,365,764
=========== =========== =========== ===========
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
<PAGE> 5
F-3
NORTH SIDE CAPITAL CORPORATION
STATEMENTS OF INCOME AND ACCUMULATED DEFICIT
FOR THE THREE MONTHS ENDED
DECEMBER 31, 1994 AND 1993
(UNAUDITED)
<TABLE>
<CAPTION>
1994 1993
---- ----
<S> <C> <C>
INTEREST INCOME $467,839 $659,932
INTEREST EXPENSE 459,116 656,307
------- --------
NET INTEREST INCOME 8,723 3,625
OPERATING AND ADMINISTRATIVE EXPENSES 4,278 3,257
------- --------
INCOME BEFORE PROVISION
FOR INCOME TAXES 4,445 368
PROVISION FOR INCOME TAXES (1,511) (125)
------- ----------
NET INCOME 2,934 243
ACCUMULATED DEFICIT
BEGINNING OF PERIOD (30,867) (33,770)
-------- ----------
ACCUMULATED DEFICIT
END OF PERIOD $ (27,933) $ (33,527)
========= =========
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
<PAGE> 6
F-4
NORTH SIDE CAPITAL CORPORATION
STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED
DECEMBER 31, 1994 AND 1993
(UNAUDITED)
<TABLE>
<CAPTION>
1994 1993
---- ----
<S> <C> <C>
OPERATING ACTIVITIES
- - - - --------------------
NET INCOME $ 2,934 $ 243
DECREASE IN INTEREST PAYABLE (19,383) (46,159)
DECREASE IN ACCOUNTS PAYABLE (1,713) (263)
DECREASE IN INTEREST RECEIVABLE 7,663 22,884
DECREASE IN OTHER ASSETS 1,511 125
AMORTIZATION OF PREMIUM ON GNMA
MORTGAGE-BACKED SECURITIES - 61,580
AMORTIZATION OF PREMIUM ON
COLLATERALIZED MORTGAGE OBLIGATIONS (12,000) (138,986)
AMORTIZATION OF DEFERRED COSTS 10,000 79,492
----------- -----------
NET CASH USED BY OPERATING ACTIVITIES (10,988) (21,084)
----------- -----------
INVESTMENT ACTIVITIES
- - - - ---------------------
PRINCIPAL PAYDOWNS ON GNMA
MORTGAGE-BACKED SECURITIES 1,314,503 2,606,365
----------- -----------
FINANCING ACTIVITIES
- - - - --------------------
PRINCIPAL PAYDOWNS ON COLLATERALIZED
MORTGAGE OBLIGATIONS (1,274,463) (2,529,347)
----------- -----------
TOTAL INCREASE IN CASH 29,052 55,934
CASH AT BEGINNING OF PERIOD 598,103 1,242,933
----------- -----------
CASH AT END OF PERIOD $ 627,155 $ 1,298,867
=========== ===========
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
<PAGE> 7
F-5
NORTH SIDE CAPITAL CORPORATION
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1994
1. Organization
North Side Capital Corporation (the "Company") was incorporated on June 23,
1986 and is a limited purpose finance subsidiary of North Side Savings Bank
("North Side"). The Company was organized for the purpose of issuing one or
more series of Collateralized Mortgage Obligations (the "Bonds") collateralized
by "fully modified pass-through mortgage-backed certificates" ("GNMA
Certificates") guaranteed as to the full and timely payment of principal and
interest by the Government National Mortgage Association, which guarantee is
backed by the full faith and credit of the United States Government; by
guaranteed mortgage pass- through certificates ("FNMA Certificates") issued and
guaranteed as to the full and timely payment of principal and interest by the
Federal National Mortgage Association; by mortgage participation certificates
("FHLMC Certificates") issued and guaranteed as to the full and timely payment
of interest and the ultimate payment of principal by the Federal Home Loan
Mortgage Corporation; (the GNMA, FNMA, FHLMC Certificates hereinafter referred
to collectively as the "Certificates"); or by a combination of such
Certificates.
The Company began operations on February 25, 1988 with the issuance of
$100,100,000 Collateralized Mortgage Obligations, Series 1, at a premium of
$6,028,027, collateralized by $100,018,251 principal amount of 11.00% GNMA
Mortgage-Backed Securities. At issuance, the Bonds consisted of:
<TABLE>
<CAPTION>
Principal Interest
Class Amount Rate
----- --------- --------
<S> <C> <C>
1-A $59,800,000 9.15%
1-B 24,000,000 10.00%
1-C 14,000,000 9.375%
1-Z 2,200,000 10.00%
1-R 100,000 1,556.75%
-----------
$100,100,000
===========
</TABLE>
The Company is a limited purpose finance subsidiary of North Side. All of
the Company's voting stock is held by North Side. As of December 31, 1994,
1,000 shares of the Company's common stock, par value $1.00 per share, were
issued and outstanding.
The Bonds were initially issued in 5 tranches, one of which is an accrual
bond (Class 1-Z). The first two tranches have been paid out and principal and
interest payments are now being received by holders of the third tranche.
Interest continues to accrue on the Class 1-Z tranche which has an unpaid
balance of $4,344,711 at December 31, 1994 compared to $4,237,878 at September
30, 1994.
<PAGE> 8
F-6
2. Summary of Significant Accounting Policies
Deferred costs:
The deferred syndicate costs, other deferred issuance costs and original
issue discount on the Bonds are being amortized using the interest method.
Income taxes:
Income taxes are provided for financial reporting purposes on the basis of
the Company filing a separate income tax return. For the three months ended
December 31, 1994 and 1993, the Company made provisions for Federal income
taxes at the statutory rate of 34%. As there are no timing differences for
financial reporting and Federal income tax purposes, no provision has been made
in the accompanying financial statements for deferred taxes. Since the Company
is a Delaware corporation, no provision has been made for state income taxes.
3. Statement of Cash Flows
For purposes of reporting cash flows, cash and cash equivalents are
defined to include cash and due from banks.
4. Related Party Transactions
Certain directors and officers of the Company are also directors and
officers of North Side.
<PAGE> 9
F-7
Item 2. - Management's Discussion and Analysis of
Financial Condition and Results of Operations
The Corporation has not issued any additional Collateralized Mortgage
Obligation Bonds since the first issuance of such bonds on February 25, 1988.
Interest income and interest expense decreased $192,093 and $197,191,
respectively, for the three months ended December 31, 1994 compared to the like
period in 1993, primarily due to paydowns of principal on both the GNMA
Mortgage-backed Securities and on the Collateralized Mortgage Obligation Bonds
("CMO"). Administrative expenses increased $1,021 for the three months ended
December 31, 1994 compared to the like period in 1993, primarily due to payment
of certain trustee fees which were in arrears.
<PAGE> 10
PART II - OTHER INFORMATION
Item 4. - Submission of Matters to a Vote of Security Holders
By written consent of the Sole Stockholder dated
December 16, 1994, Thomas M. O'Brien, Irvin L.
Cherashore, Donald C. Fleming and Donald J. Puglisi
were re-elected as directors of the Company.
The following items have been omitted as inapplicable or not required under the
applicable instructions:
Item 1. - Legal Proceedings
Item 2. - Changes in Securities
Item 3. - Defaults Upon Senior Securities
Item 5. - Other Information
Item 6. - Exhibits and Reports on Form 8-K
<PAGE> 11
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.
NORTH SIDE CAPITAL CORPORATION
By: /s/ Thomas M. O'Brien
----------------------------
Thomas M. O'Brien
President, Chief Executive
Officer and Director
Date: February 10, 1995
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated:
SIGNATURE POSITION DATE
- - - - --------- -------- ----
/s/ Thomas M. O'Brien President, Chief February 10, 1995
- - - - --------------------- Executive Officer
Thomas M. O'Brien and Director
/s/ Donald C. Fleming Director, February 10, 1995
- - - - --------------------- Vice President and
Donald C. Fleming Treasurer (Principal
Financial and
Accounting Officer)
<PAGE> 12
EXHIBIT INDEX
-------------
Exhibit 27 - Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-1995
<PERIOD-START> OCT-01-1994
<PERIOD-END> DEC-31-1994
<CASH> 627,155
<SECURITIES> 16,210,407
<RECEIVABLES> 155,967
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 798,095
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 17,061,139
<CURRENT-LIABILITIES> 327,050
<BONDS> 16,761,022
<COMMON> 1,000
0
0
<OTHER-SE> (27,933)
<TOTAL-LIABILITY-AND-EQUITY> 17,061,139
<SALES> 0
<TOTAL-REVENUES> 467,839
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 4,278
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 459,116
<INCOME-PRETAX> 4,445
<INCOME-TAX> 1,511
<INCOME-CONTINUING> 2,934
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,934
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
