SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) January 9, 1997
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FIRSTCITY FINANCIAL CORPORATION
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(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
Delaware 1-7614 76-0243729
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(STATE OR OTHER JURISDICTION (COMMISSION (IRS EMPLOYER
OF INCORPORATION) FILE NUMBER) IDENTIFICATION NO.)
6400 Imperial Drive, Waco, TX 76712
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
Registrant's telephone number, including area code (817) 751-1750
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(FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT)
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ITEM 5. OTHER EVENTS
On January 9, 1997, FirstCity Financial Corporation and Harbor
Financial Group jointly announced that they had executed a Letter of Intent to
merge the two companies. A copy of the press release containing such
announcement is annexed hereto as Exhibit 99.1 and incorporated herein by
reference.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
The Exhibit Index at page 4 is incorporated herein by reference.
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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.
FIRSTCITY FINANCIAL CORPORATION
/s/ James T. Sartain
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James T. Sartain, President
Date: January 17, 1997
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EXHIBIT INDEX
Exhibit Number Exhibit Page Number
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99.1 Press Release, dated January 9, 1997.
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EXHIBIT 99.1
FIRSTCITY FINANCIAL AND HARBOR FINANCIAL GROUP
ANNOUNCE MERGER PLANS
HOUSTON, JANUARY 9, 1997....FirstCity Financial Corporation and Harbor
Financial Group, Inc. jointly announced today the execution of a Letter of
Intent to merge the two companies. Under the terms of the Letter, FirstCity will
issue 1,600,000 shares of its common stock in exchange for 100% of the
outstanding capital stock of Harbor.
Harbor is the parent of Houston-based Harbor Financial Mortgage
Corporation, and Dallas-based New America Financial, Inc. which are mortgage
banking concerns with 625 employees in 37 locations nationwide. The companies
originate and service A through D grade residential loans, home improvement
loans and commercial mortgages for a variety of agency and private investors
utilizing its network of loan officers, retail brokers and correspondents. The
company also provides consulting services through Hamilton, Carter, Smith &
Company, an industry-leading consulting firm.
Upon completion of the merger, which will be treated as a pooling of
interests for accounting purposes, Harbor will operate as a wholly-owned
subsidiary of FirstCity Financial. The combined companies will have
approximately $80 million in equity, assets of over $440 million and 825
employees. The transaction is subject to the completion of satisfactory
due-diligence by both companies, the execution of a definitive merger agreement,
approval of both companies' shareholders, and various regulatory approvals.
James T. Sartain, President of FirstCity said, "This merger represents the
accomplishment of a long-stated goal of Firstcity management - to acquire a
well-managed, profitable, growth oriented financial services concern. The
combination of the two companies results in a strong, well capitalized company
with Harbor's growth opportunities greatly enhanced by FirstCity's access to the
public debt and equity markets. Harbor's well-established origination and
servicing capabilities, as well as its demonstrated earnings capacity, moves
FirstCity well along with our plans to diversify the business and earnings base
of our company into market niches which are consistent with our own expertise
and strategic direction."
Richard J. Gillen, Harbor's Chairman and CEO said, "The affiliation with
FirstCity affords great opportunities for Harbor's customers, shareholders and
employees. In our
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case, the alternative was to access the public markets on our own, but we found
the partnership with FirstCity to be very beneficial to all concerned. Our
shareholder group will have significant opportunity for future growth and
enhancement. Our employees will benefit from the affiliation with a diverse
financial services company and our customers will benefit from the growth in our
mortgage-related product offerings."
Harbor's current production capacity is approximately $2.5 billion per
year. It currently services approximately $4.3 billion of home mortgage product
off its servicing platforms in Houston and Scottsbluff, Nebraska. For its year
ended September 30, 1996, Harbor earned $3.72 million after tax. Pre-tax net
income was $5.99 million. Total assets were in excess of $200 million and
stockholder's equity exceeded $10 million.
FirstCity Financial Corporation, is a financial services company engaged
in value investing through special asset acquisition, management and
disposition, as well as specialized consumer lending. Its common (FCFC) and
special preferred (FCFCP) stocks are listed on the NASDAQ National Market
System.
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