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, 1997
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COMMISSION FILE NUMBER 33-13668
(S-11 Registration Number)
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HOLCO MORTGAGE ACCEPTANCE CORPORATION-I
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(Exact name of registrant as specified in its charter)
DELAWARE
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(State or other jurisdiction of
incorporation of organization)
220 WEST COLFAX STREET
SUITE 200
SOUTH BEND, IN 46601
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(Address of principal executive offices)
38-2733561
------------------------------------
(IRS Employer Identification Number)
(219) 289-3585
----------------------------------------------------
(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 30, 1997.
<PAGE>
HOLCO MORTGAGE ACCEPTANCE CORPORATION -I
BALANCE SHEETS
<TABLE>
September 30,
1997 December 31,
ASSETS (Unaudited) 1996
------------- ------------
<S> <C> <C>
CASH .......................................................... $ 1,000 $ 1,000
INTEREST RECEIVABLE ........................................... 71,364 72,293
INVESTMENTS:
Insured GNMA mortgages, at cost .......................... 9,337,232 9,403,269
Funds held by Trustee .................................... 78,994 91,144
----------- -----------
Net Investments .......................................... 9,416,226 9,494,413
ORGANIZATION COSTS, at amortized cost ......................... 0 0
COLLATERALIZED MORTGAGE BOND OFFERING COSTS, net of accumulated
amortization of $1,043,143 ............................... 8,379 11,571
----------- -----------
Total Assets ........................................ $ 9,496,969 $ 9,579,277
=========== ===========
LIABILITIES & STOCKHOLDERS' EQUITY
LIABILITIES:
COLLATERALIZED MORTGAGE BONDS ............................ $ 8,747,000 $ 8,816,000
ACCOUNTS PAYABLE ......................................... 23,163 38,756
INTEREST PAYABLE ......................................... 136,480 137,565
----------- -----------
Total Liabilities ................................... $ 8,906,643 $ 8,992,321
STOCKHOLDERS' EQUITY:
COMMON STOCK, $0.01 par value; authorized 700,000 shares;
issued and outstanding 563,750 shares .................... $ 5,638 $ 5,638
ADDITIONAL PAID-IN CAPITAL ............................... 2,862,878 2,862,878
RETAINED EARNINGS ........................................ (2,278,190) (2,281,560)
----------- -----------
Total Stockholders' Equity .......................... $ 590,326 $ 586,956
----------- -----------
Total Liabilities & Stockholders' Equity ............ $ 9,496,969 $ 9,579,277
=========== ===========
</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, 1997
<TABLE>
For the Three For the Nine
Months Ended Months Ended
Sept. 30, 1997 Sept. 30, 1997
-------------- --------------
<S> <C> <C>
INCOME:
INTEREST INCOME ............................. $212,702 $639,885
INTEREST INCOME - Market Discount ........... 2,016 8,226
-------- --------
Total Income ........................... $214,718 $648,111
-------- --------
EXPENSES:
INTEREST EXPENSE ............................ $205,008 $616,672
INTEREST EXPENSE - AMORTIZATION OF
BOND OFFERING COSTS ......................... 540 3,192
MANAGEMENT FEE .............................. 1,542 4,626
-------- --------
Total Expenses ......................... $207,090 $624,490
-------- --------
NET INCOME BEFORE PROVISION
FOR STATE INCOME TAXES ........................... $ 7,628 $ 23,621
PROVISION FOR STATE TAXES ........................ 890 2,967
-------- --------
Net Income ............................. $ 6,738 $ 20,654
======== ========
Net Income per share (563,750
shares outstanding) .................... $ 0.01 $ 0.04
======== ========
</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 Three For the Nine
Months Ended Months Ended
Sept. 30, 1996 Sept. 30, 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 CASH FLOW
(Unaudited)
<TABLE>
For the Three For the Nine
Months Ended Months Ended
Sept. 30, 1997 Sept. 30, 1997
-------------- --------------
<S> <C> <C>
Cash flows from operating activities:
Net income for the period ................................................. $ 6,738 $ 20,654
Adjustments to reconcile net income to net cash provided by operating
activities:
Amortization of net GNMA
certificate discount ................................................. (2,016) (8,226)
Amortization of collateralized mortgage
obligation bond offering costs ....................................... 540 3,192
Decrease (increase) in:
Interest Receivable ............................................. 190 559
Increase (decrease) in:
Accounts payable ................................................ 890 (15,593)
Interest payable ................................................ (374) (1,085)
--------- ---------
Cash flows provided by operating activities ............................... $ 5,968 $ (499)
--------- ---------
Cash flows from investing activities:
Principal payments on GNMA certificates ................................... $ 25,329 $ 74,263
--------- ---------
Cash flows from financing activities:
Redemption of collateralized mortgage obligation bonds .................... $ (24,000) $ (69,000)
Dividend payment to stockholders .......................................... (5,638) (16,914)
--------- ---------
Cash flows used in financing activities ................................... $ (29,638) $ (85,914)
--------- ---------
Increase (decrease) in cash and
cash equivalents .......................................................... $ 1,659 $ (12,150)
Cash and cash equivalents, beginning ........................................... 78,335 92,144
--------- ---------
Cash and cash equivalents, ending .............................................. $ 79,994 $ 79,994
========= =========
Supplemental disclosure of cash flow information:
Cash paid during the year for:
Interest .................................................................. $ 205,382 $ 617,757
State income taxes ........................................................ 0 3,500
</TABLE>
See Notes to Financial Statements.
<PAGE>
HOLCO MORTGAGE ACCEPTANCE CORPORATION -I
STATEMENTS OF CASH FLOW
(Unaudited)
<TABLE>
For the Three For the Nine
Months Ended Months Ended
Sept. 30, 1996 Sept. 30, 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 $ 18,044
--------- ---------
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 .............................................. $ 95,140 $ 95,140
========= =========
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>
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, 1997 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, 1997 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.
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.***
<PAGE>
* 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 31, 1997.
(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 13, 1997 /s/ John T. Phair
--------------------------------------
John T. Phair
Vice President, Treasurer and Director
Chief Accounting Officer
Date: November 13, 1997 /s/ Kevin C. Horton
--------------------------------------
Kevin C. Horton
Vice President, Secretary and Director
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FORM THE
SEPTEMBER 30, 1997 FORM 10-Q OF 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-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 1
<SECURITIES> 9,416
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 9,497
<CURRENT-LIABILITIES> 160
<BONDS> 8,747
0
0
<COMMON> 6
<OTHER-SE> 584
<TOTAL-LIABILITY-AND-EQUITY> 9,497
<SALES> 0
<TOTAL-REVENUES> 648
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 8
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 617
<INCOME-PRETAX> 24
<INCOME-TAX> 3
<INCOME-CONTINUING> 21
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 21
<EPS-PRIMARY> .04
<EPS-DILUTED> .04
</TABLE>
