SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
------------------------
FORM 10-Q
/X/ Quarterly report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For Quarter Ended September 30, 1996
-------------------------
COMMISSION FILE NUMBER 33-13668
(S-11 Registration Number)
-------------------------
HOLCO MORTGAGE ACCEPTANCE CORPORATION-I
(Exact name of registrant as specified in its charter)
DELAWARE
(State or other jurisdiction of
incorporation of organization)
220 WEST COLFAX STREET
SUITE 200
SOUTH BEND, IN 46601
(Address of principal executive offices)
38-2733561
(IRS Employer Identification Number)
(219) 284-3789
(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 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 [ ]
The number of shares outstanding of each class of Registrant's Common Stock was
563,750 shares of common stock, par value $.01 as of September 1, 1996.
<PAGE>
Item 1. Financial Statements
HOLCO MORTGAGE ACCEPTANCE CORPORATION -I
BALANCE SHEETS
<TABLE>
Sept. 30, 1996 December 31,
ASSETS (Unaudited) 1995
-------------- -----------
<S> <C> <C>
CASH ................................................................ $ 1,000 $ 1,000
INTEREST RECEIVABLE ................................................. 71,400 72,938
Insured GNMA mortgages, at cost ................................ 9,448,730 9,492,787
Funds held by Trustee .......................................... 94,141 86,334
----------- -----------
Net Investments ................................................ 9,542,871 9,579,121
ORGANIZATION COSTS, at amortized cost ............................... 0 0
----------- -----------
COLLATERALIZED MORTGAGE BOND OFFERING COSTS, net of accumulated
amortization of $1,051,522
0 12,159
----------- -----------
Total Assets .............................................. $ 9,615,271 $ 9,665,218
=========== ===========
LIABILITIES & STOCKHOLDERS' EQUITY
LIABILITIES:
COLLATERALIZED MORTGAGE BONDS .................................. $ 8,838,000 $ 8,838,000
ACCOUNTS PAYABLE ............................................... 41,693 39,023
INTEREST PAYABLE ............................................... 138,039 138,878
----------- -----------
Total Liabilities ......................................... $ 9,017,732 $ 9,077,901
STOCKHOLDERS' EQUITY:
COMMON STOCK, $0.01 par value;
authorized 700,000 shares; issued and
outstanding 663,750 shares ..................................... $ 5,638 $ 5,638
ADDITIONAL PAID-IN CAPITAL ..................................... 2,862,878 2,862,878
RETAINED EARNINGS .............................................. (2,270,977) (2,281,199)
----------- -----------
Total Stockholders' Equity ................................ $ 597,539 $ 587,317
----------- -----------
Total Liabilities & Stockholders' Equity .................. $ 9,615,271 $ 9,665,218
=========== ===========
</TABLE>
See Notes to Financial Statements.
<PAGE>
HOLCO MORTGAGE ACCEPTANCE CORPORATION -I
STATEMENTS OF OPERATIONS
(Unaudited)
For the Three and Nine Month Period Ended September 30, 1996
<TABLE>
For the For the
Three Nine
Months Months
Sept. 30 Sept. 30
1996 1996
-------- --------
<S> <C> <C>
INCOME:
INTEREST INCOME ........................................................... $214,878 $646,027
INTEREST INCOME - Market Discount ......................................... 0 68,807
-------- --------
Total Income ......................................................... $214,878 $714,834
-------- --------
EXPENSES:
INTEREST EXPENSE .......................................................... $207,140 $622,898
INTEREST EXPENSE - AMORTIZATION OF
BOND OFFERING COSTS ....................................................... 0 12,159
MANAGEMENT FEE ............................................................ 1,542 4,626
-------- --------
Total Expenses ....................................................... $208,682 $639,683
NET INCOME BEFORE PROVISION
FOR STATE INCOME TAXES ......................................................... $ 6,196 $ 75,151
PROVISION FOR STATE TAXES ...................................................... 890 2,670
-------- --------
Net Income ........................................................... $ 5,306 $ 72,481
======== ========
Net Income per share (563,750
shares outstanding) .................................................. $ 0.01 $ 0.13
======== ========
</TABLE>
See Notes to Financial Statements.
<PAGE>
HOLCO MORTGAGE ACCEPTANCE CORPORATION -I
STATEMENTS OF OPERATIONS
(Unaudited)
For the Three and Nine Month Period Ended September 30, 1995
For the For the
Three Nine
Months Months
Sept. 30 Sept. 30
1995 1995
-------- --------
INCOME:
INTEREST INCOME ............................. $216,972 $652,252
INTEREST INCOME - Market Discount ........... 32,413 32,421
Total Income ........................... $249,385 $684,673
EXPENSES:
INTEREST EXPENSE ............................ $209,062 $628,539
INTEREST EXPENSE - AMORTIZATION OF
BOND OFFERING COSTS ......................... 9,206 8,474
MANAGEMENT FEE .............................. 1,542 4,626
Total Expenses ......................... $219,810 $641,639
NET INCOME BEFORE PROVISION
FOR STATE INCOME TAXES ........................... $ 29,575 $ 43,034
PROVISION FOR STATE TAXES ........................ 890 2,670
Net Income ............................. $ 28,685 $ 40,364
Net Income per share (563,750
shares outstanding) .................... $ 0.05 $ 0.07
See Notes to Financial Statements.
<PAGE>
HOLCO MORTGAGE ACCEPTANCE CORPORATION -I
STATEMENTS OF CASH FLOW
(Unaudited)
<TABLE>
For the For the
Three Nine
Months Months
Sept. 30 Sept. 30
1996 1996
-------- --------
<S> <C> <C>
Cash flows from operating activities:
Net income for the period ................................................. $ 5,306 $ 72,481
Adjustments to reconcile net income to net cash provided by operating
activities:
Amortization of net GNMA
certificate discount ................................................. 0 (68,807)
Amortization of collateralized mortgage
obligation bond offering costs ....................................... 0 12,159
Decrease (increase) in:
Interest Receivable ............................................. 174 510
Increase (decrease) in:
Accounts payable ................................................ 890 2,670
Interest payable ................................................ (328) (969)
Cash flows provided by operating activities ............................... $ 6,042 $ 18,049
--------- ---------
Cash flows from investing activities:
Principal payments on GNMA certificates ................................... $ 23,069 $ 67,676
--------- ---------
Cash flows from financing activities:
Redemption of collateralized mortgage ..................................... $ (21,000) $ (62,000)
obligation bonds
Dividend payment to stockholders .......................................... (5,638) (16,914)
Cash flows used in financing activities ................................... $ (26,638) $ (78,914)
--------- ---------
Increase (decrease) in cash and
cash equivalents .......................................................... $ 2,473 $ 6,806
Cash and cash equivalents, beginning ........................................... 92,667 88,334
--------- ---------
Cash and cash equivalents, ending .............................................. $ 95,141 $ 95,141
========= =========
Supplemental disclosure of cash flow information:
Cash paid during the year for:
Interest .................................................................. 207,469 623,555
State income taxes ........................................................ 0 0
</TABLE>
See Notes to Financial Statements.
<PAGE>
HOLCO MORTGAGE ACCEPTANCE CORPORATION -I
STATEMENTS OF CASH FLOW
(Unaudited)
<TABLE>
For the For the
Three Nine
Months Months
Sept. 30 Sept. 30
1996 1996
-------- --------
<S> <C> <C>
Cash flows from operating activities:
Net income for the period ................................................. $ 28,685 $ 40,364
Adjustments to reconcile net income to net cash provided by operating
activities:
Amortization of net GNMA ............................................. (32,413) (32,421)
certificate discount
Amortization of collateralized mortgage
obligation bond offering costs ....................................... 0 8,474
Decrease (increase) in:
Interest Receivable ............................................. 9,206 465
Increase (decrease) in:
Accounts payable ................................................ 159 (890)
Interest payable ................................................ (305) (899)
--------- ---------
Cash flows provided by operating activities ............................... $ 6,222 $ 15,093
--------- ---------
Cash flows from investing activities:
Principal payments on GNMA certificates ................................... $ 21,048 $ 61,710
--------- ---------
Cash flows from financing activities:
Redemption of collateralized mortgage ..................................... $ (19,000) $ (57,000)
obligation bonds
Dividend payment to stockholders .......................................... (5,638) (22,551)
--------- ---------
Cash flows used in financing activities ................................... $ (24,638 $ (79,551)
--------- ---------
Increase (decrease) in cash and
cash equivalents .......................................................... $ 2,632 $ (2,748)
Cash and cash equivalents, beginning ........................................... 83,591 88,971
--------- ---------
Cash and cash equivalents, ending .............................................. $ 86,223 $ 86,223
========= =========
Supplemental disclosure of cash flow information:
Cash paid during the year for:
Interest .................................................................. 209,367 629,438
State income taxes ........................................................ 0 3,560
</TABLE>
See Notes to Financial Statements.
<PAGE>
NOTES TO FINANCIAL STATEMENTS
Note 1. In the opinion of the Corporation, the accompanying unaudited
financial statements contain all adjustments necessary to present
fairly the financial position as of September 30, 1996 and the results
of operations and changes in financial position for the three and nine
months then ended.
Note 2. The results of operations for the three and nine month period ended
September 30, 1996 is not necessarily indicative of the results to be
expected for the full year.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
The Corporation's results of operations depend primarily on the amount
of interest paid on the Multifamily GNMA Certificates securing the
Bonds, the incidence of prepayments of principal made on the mortgage
loans underlying such multifamily GNMA Certificates, the amount of
earnings from re-investment of distributions on such Multifamily GNMA
Certificates and the amount of the Corporation's expenses, including,
among other things, interest payments due on the Bonds and the
operating expenses of the Corporation. Substantially all of the
Corporation's expenses are interest payments due on the Bonds,
management fees, audit, legal, trustee and other related expenses,
state and local taxes, reporting requirement fees and costs of
maintaining the Corporation's corporate qualifications. It is
anticipated that scheduled distributions of principal of and interest
on the Multifamily GNMA Certificates pledged as collateral for the
Bonds, together with the re-investment earnings thereon, will provide
sufficient funds to make timely payment of all amounts due on the Bonds
in accordance with their terms and to pay all of the operating expenses
of the Corporation.
The Corporation's primary sources of funds with respect to the Bonds
are payments of principal of and interest on the Multifamily GNMA
Certificates pledged to secure the Bonds and re-investment earnings
thereon. The Corporation anticipates that it will have sufficient
liquidity and capital resources to pay all other expenses of the
Corporation. The Corporation does not have any significant source of
funds other than distributions on the Multifamily GNMA Certificates
pledged to secure the bonds and re-investment earnings thereon.
Virtually all of the assets and liabilities of the Corporation are
monetary in nature. Because the Bonds are secured by Multifamily GNMA
Certificates which pay interest at specified rates, and because
payments on the Bonds are at specified rates of interest, inflationary
pressures are not expected to affect the ability of the Corporation to
meet its obligations as they become due.
The Corporation expects that scheduled distributions of principal of
and interest on the Multifamily GNMA Certificates pledged to secure the
Bonds, together with the re-investment earnings thereon, will at all
times exceed the aggregate of the amounts due as payments of principal
of and interest on the Bonds and operating expenses of the Corporation.
Because the amount of interest income that the Corporation receives on
the Multifamily GNMA Certificates, together with the re-investment
earnings on distributions of principal of and interest on the
Multifamily GNMA Certificates, may in some periods be less than the sum
of the Corporation's interest expense on the Bonds and operating
expenses for such periods, the Corporation's ratio of earnings to fixed
charges for such periods may be less than one to one. Any such income
shortfalls will not, however, be cash flow shortfalls because principal
and interest payments on the Multifamily GNMA Certificates, together
with re-investment income thereon, will be available in sufficient
amounts to meet interest income shortfalls and to make required
principal payments on the Bonds. In addition, the amortization of
issuance costs of the Bonds will reduce the Corporation's ratio of
earnings to fixed charges but will not affect the amount of cash
available to meet fixed charges.
<PAGE>
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
(a) The following documents are filed as part of this Form 10-Q and
incorporated herein by this reference:
4.1 Specimen certificate representing Pass-Through Equity
Residual Certificates of the Registrant.*
4.2 Specimens of the Series A, B and C Collateralized Mortgage
Obligation Bonds.*
4.3 Trust Indenture dated as of August 26, 1987.*
4.4 Form of Guaranty Agreement between the servicer and GNMA with
respect to Project Loan Securities under the GNMA I
Program.**
28 Form 10-K of registrant.***
* Each of the foregoing was filed as an Exhibit with Post
Effective Amendment No. 1 on Form S-11 (Registration No.
33-13688) filed on September 10, 1987.
** The foregoing was filed as an Exhibit to the Registration
Statement on Form S-11, No. 33-13668 on April 22, 1987.
*** The foregoing was filed by the registrant on March 28, 1996.
(b) No reports on form 8-K have been filed during the fiscal quarter
for which this Form 10-Q is being filed.
<PAGE>
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 thereunto duly authorized.
HOLCO MORTGAGE ACCEPTANCE CORPORATION-I
(Registrant)
Date: November 12, 1996 /s/ John T. Phair
-----------------------------------------
John T. Phair
Vice President, Treasurer and Director
Chief Accounting Officer
Date: November 12, 1996 /s/ Kevin C. Horton
-------------------------------------------
Kevin C. Horton
Vice President, Secretary and Director
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFROMATION EXTRACTED FROM THE
SEPTEMBER 30, 1996 10-Q FOR HOLCO MORTGAGE ACCEPTANCE CORPORATION-I AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<CASH> 1
<SECURITIES> 9,543
<RECEIVABLES> 71
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 9,615
<CURRENT-LIABILITIES> 179
<BONDS> 8,838
0
0
<COMMON> 6
<OTHER-SE> 592
<TOTAL-LIABILITY-AND-EQUITY> 9,615
<SALES> 0
<TOTAL-REVENUES> 715
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 623
<INCOME-PRETAX> 75
<INCOME-TAX> 3
<INCOME-CONTINUING> 72
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 72
<EPS-PRIMARY> .13
<EPS-DILUTED> .13
</TABLE>
